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 offbuying a stockfrom 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.

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