What is the signifigance of a 52 week low or high and are there other periodical highs and lows to pay attenti

Question

on to investing in stocks?

Answer 1

The significance is that it shows the current stock price in relation to it's 52 week hi's & lo's. This gives you a better indicator of where the price is in terms of trends. Most people avoid buying stocks when there trading at their 52 week hi's. The goal is to buy lo and sell hi. This is just one common measure to help one do just that.

Answer 2

Don't be afraid of a stock hitting a new high. It signifies confidence and strength, which are two things you want in a stock.

Sometimes, though, you can snap up some shares of a stock at a 52-week low and make yourself some money. But the other side of that argument is that it is trading at a 52-low for a reason so it might be time to avoid it.

Answer 3

There are more investment theories than there are investors, but one that I have been impressed with is William O'Neill's. His strategy involves buying the stock when it "breaks out" -- hits a new high -- after it has been trending up for a while. The theory is that at a new high there are no holders waiting to sell as soon as it reaches the price they bought it at, and therefore no "selling pressure" to depress the stock price. I think the book is worth buying and reading if you are actually investing in individual stocks.