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52-week low stocks

Share prices vary over a period of time. The 52-week low is defined as the lowest price at which the stock was traded over the latest 52-week period or during the previous year. Some traders and investors like to use this as a technical indicator that helps decide whether to buy or sell a stock. Typically, a 52-week low is defined by the closing price of the stock. In other words, it is possible that the stock has traded for a lower price in intra-day trade over the last 52 weeks.

Investors and traders may use 52 week low/ high for determining the entry or exit point for a given stock. For example, many traders may decide to buy a share if it crosses the 52-week high as they believe that it now has enough momentum to continue rising further. This is why you would see a spike in trading volumes as a stock approaches 52-week low/ high.

If a share hits its 52-week low intra-day but bounces back from it before the close, it could indicate a bottom. Many short-sellers would see this as an indication to start buying to cover their position. This is also the time for bargain hunters to purchase the stock as they do not expect the price to fall any lower. A bottom is indicated by a daily hammer candlestick indicating that the share traded significantly lower than its opening price but rallied back up later in the day.

What is 52-Weeks Low Effect?

The lowest price that a stock traded on in the last 52 weeks tends to become a psychological support price for the stock. For example, if a share falls to its 52-week low of ₹X and bounces back – the next time the share approaches this low, many investors and traders would expect it to bounce back again and start buying the share. This increased demand would arrest the downward momentum and ensure that the share price stays above the 52-week low.

While 52-week high / low is a good indicator of whether you are getting a good price on the stock and the momentum it has built up – your investment decision must be based on much more than just this. Just looking at a 52-week low/ high will not give you the true picture of what is happening in the company. You must always analyze the fundamentals of the company before making the decision to invest in one. You still have blue chip stocks and high dividend yield stocks forming the core of your investment portfolio, regardless of whether they are trading close to or away from the 52-week low/ high.

Stocks near 52 weeks low indicate that the stocks are quoting at or near their lowest price of 52 weeks. At reliancesmartmoney.com, get a complete list of stocks that are at or near their 52-weeks low, along with their historical data for the past year.