Some may contend that a new 52 week high or low is just another number, however, because of investor's emotional connection and their nature, 52 week highs and lows are a widely measured and watched statistic by both technical analysts and investors. Whether the significance is based on longer term investors overlooking the day to day ebbs and flows or otherwise, nearly everyone makes note of a 52wk breakout.
Because of this we’ve provided a way for you to catch the annual breakouts in realtime.
When you launch MOMO, you will note that some cells, have a solid green or red background. When these are displayed, the underlying symbol is reaching a new 52wk high or low. As a stock breaks out a series of solid cells will be shown. The MOMO screenshot below shows where ServiceNow (Symbol: NOW) has broken down with multiple new 52-week lows, where Facebook (Symbol: FB) is shown reaching new daily highs, but not new 52 week highs as they are not solid green cells.
The impact of 52-week highs and lows
If a stock or index (such as SPY, DJIA, $COMPQ) hit a new 52 week high/low, everyone is allayed or dismayed. If a stock/index is hitting new highs, everyone is pleased that everything is on track and healthy. As such, investors get rewarded and attracts new interest from traders and funds looking to profit from the long term directional momentum.
Also when a stock breaks a 52-week high, the rallies can be significant. This is due to breaking out of the year’s worth of overhead supply where a portion of traders either set their stops to collect their profits or cover their shorts. Psychologically, the euphoria and news around the event can further bolster the momentum.
New 52-week lows are similar events. When a stock reaches a new 52-week low investors can use this point to throw in the towel and cut their losses. Short sellers may jump in on the momentum or "buy the dippers” may save the day and make the stock bounce. All said, the 52-week event is closely monitored.
Profit from Momentum
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