52 Week High/Low
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What Is the 52-Week High and Low?
It is a measure used by investors to analyze a stock’s current price and help predict its future movements.
A stock may garner more attention from investors as it nears its 52-week high or 52-week low.
How Stock Market High and Low Is Determined
The 52-week high/low is determined by the closing price of the security.
The price of a stock may very well fluctuate above or below its 52-week record over the course of a trading session, but if the price does not close above or below the record, the change does not register as having hit a new high or low.
Importance of 52-Week High and Low
Investors may use the 52-week high/low metric to determine an entry or exit point for a given stock.
Oftentimes, these fluctuations indicate to investors that a stock has reached its peak or bottom, and may not rise or fall in the near term.
For that reason, the 52-week high or low provide a level of resistance or support to a given security.
Alternatively, if a stock breaches it’s 52-week high and continues upward, this could indicate to investors that there must be some factors that have generated enough momentum to carry the price above its previous 52-week range.
They believe that the momentum will continue to push the price in the same direction, making this a good time to buy.
The same rationale can be applied when a stock dips below its 52-week low.