52-Week High and Low

The 52-week high is the highest price a stock has reached in the past year. The 52-week low is the lowest. Together they show the full range the stock has traded in over the last twelve months.

A stock trading near its 52-week high has been doing well relative to its recent history. One trading near its 52-week low has been struggling. Where the current price sits within that range gives you a quick sense of context — is this stock closer to the top or bottom of its recent range?

Stocks approaching their 52-week high sometimes face resistance, where sellers who bought lower take profits. But stocks that break through to new highs can keep going, because there is no one sitting on losses waiting to sell.

One common screen is to look for stocks within a few percent of their 52-week high. The idea is that strength tends to continue — stocks making new highs have momentum behind them. The opposite screen, looking for stocks near their 52-week low, appeals to value-oriented traders who think the selling has gone too far.

Breakout traders specifically wait for a stock to cross above the 52-week high on heavy volume. The logic is that once the old high is cleared, the stock has no overhead supply (no one above the current price waiting to sell at break-even), so the path of least resistance is up.