Financial publications and Web sites, such as Yahoo! Finance, publish a list of stocks every day that hit their 52-week high prices and another list of those that sink to a 52-week low.
Given the choice, would you be better off buying a stock from the 52-week high list or the 52-week low list?
The Theory Behind 52-Week High and/or Low
Yes, as you would guessed it, history has shown that many growth companies often have to surpass their 52-week highs multiple times in order to reach where they are today.
Think about the recent multi-bagger stocks like Facebook, Apple, AEM Holdings, Riverstone and more…
In contrary, companies with bad fundamentals like Noble Group and Singapore Press Holdings (SPH) can reach 52-low and keep drowning to even multi-year low or even go bankrupt.
As such, stocks trading near their 52 weeks high may actually serve as a good technical indicator for winning stocks with great fundamentals and they can often ride to greater heights....