Many financial publications and websites, like MarketWatch, always publish the list of stocks that hit their 52-week high price and those that drop to a 52-week low. This information is important for every trader, you have to access that information every day. After that, you will question, should you buy low or buy success? The answer is to buy winning stock.
Buying Low
Those who buy low usually believe that they can make a good guess out of the 52-week low list. They randomly pick a company from the 52-week low list to find a good bargain.
They gamble and argue that those ‘bottomed up’ companies have a higher chance to go up and a company at the top was to continue its upward momentum.
Buying Success
Traders who buy success usually believe that companies at the 52-week high list are doing right. Thus, the chance for them to keep moving upward is big. If not, at least they will stay in a straight line.
These traders, therefore, think that this is a better guess than the 52 week low companies, which they believe will keep going down.
The Truth
To tell you the truth, these two types of stock should not become your only consideration before purchasing shares of stock. The other thing that may give a better guide is a price direction.
But still, it is an acceptable strategy to help you know which stocks that have lost favor momentary with the market. But you may still question whether those companies in the 52-week low list can bounce back for gains? Of course, they can. But that requires you to spend a significant amount of time to find few that can survive or fewer that thrives.
Buy the Winning
You can find the winning stock from evaluating the 52-week high list. But, make sure you find the stock that has been artificially bid up by some market over-reach, that is the stock which price has jumped 30% in a day. That can be easily found in the 52-week high list.
This winning stock should have steady grown in a long period of time to get its way to the list. After you find this stock, then begin your evaluation.
The market has done so much to help you by rewarding the company with an escalating stock price, but you still need to do another evaluation.
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