This is part of my intermittent series on price, one of the most important and commonly encountered considerations in investing and trading. For this post, I will talk about one of the most used metric in determining a buy or sell call, the 52-Week High/Low (52WH/L).

I had used the 52WH/L as one of the indicators during my trading days. After I had identified a counter for trading, I would look at its 52WH/L price: if the current price was within the bottom 30% of the high/low range, then it was a buy opportunity. Similarly if the current price of my holding was within the top 30% of the high/low range, and if I was in-the-money, I would consider selling it.

Due to the emphasis of the 52WH/L by so many market participants, it had somewhat become an implicit resistance-support number in technical analysis terms, and the amount of trading volume will...