EXPLAINED: Why should you track a stock’s 52-week high or low?

A 52-week high indicates the highest level at which a stock has traded for 52 weeks, which is a year. Similarly, 52-week low indicates the lowest point at which the stock has traded in 52-week. So, if a stock hit a 52-week high, it shows a bullish trend and if it hits a 52-week low, it indicates a bearish trend.  

Why is a 52-week high significant? 

When a stock hits its 52-week high, it gathers attention for its performance from investors. This is also the case when it hits a 52-week low. This is a measure of analysis for market watchers. 

At which point is the high or low of a stock calculated? 

A 52-week high or low is calculated on the basis of the closing price of a stock. A stock can fluctuate at a high point or a low point, but only when it crosses a 52-week high or low, does it set a new record. 

Why do investors watch the 52-week high or low closely? 

The 52-week high or low is benchmark for an investor when he wants to take a buy or sell call. Usually, when a stock re-touches a 52-week high, many feel that the stock may have reached its peak and would probably flat out then-after and decide to sell.  

Why should you watch the 52-week high or low of a stock?  

If you want to make an investment in a stock, you should make a note of its 52-week high or low to decide triggers for sell or buy. This is an overall good indicator of a stock’s performance over a certain period of time. While there are various other considerations that could help you decide on where to put in your money – this step clearly helps you understand the entry and exit points. 

How to sharpen your trade with 52-week high or low? 

Traders during the day often track all stocks which have hit a 52-day high intraday to shortlist stocks and narrow down their stock-pick list. For those starting out with trading, this is a good way to sharpen trading skills and make effective trading choices.  
 

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