52-Week High/Low

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DEFINITION of '52-Week High/Low'

The highest and lowest prices that a stock has traded at during the previous year. Many traders and investors view the 52-week high or low as an important factor in determining a stock's current value and predicting future price movement.

BREAKING DOWN '52-Week High/Low'

As a stock trades within its 52-week price range (the range that exists between the 52-week low and the 52-week high), investors may show increased interest as price nears either the high or the low. A popular strategy used by stock traders is to buy when price exceeds its 52-week high, or to sell when price falls below its 52-week low. The rationale behind this strategy is that if price breaks out from the 52-week range (either above or below) there will be enough momentum to continue the price move in a favorable direction.

Alternatively, another strategy is to sell when price reaches its 52-week high on the assumption that price will recede, or to buy when price reaches its 52-week low in anticipation of a value play. Traders and investors typically conduct additional technical and/or fundamental analysis for confirmation.

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