What is the 52-Week Range
The 52-week range shows the lowest and highest price at which a stock has traded at in the previous 52 weeks. Investors can find a stock's 52-week range in a stock's quote summary along with other information such as the daily price change and year-to-date change. Companies that have traded for less than a year still show a 52-week range, even though there isn't data for the full range.
The below chart shows U.S. Steel Group’s 52-week range between 2017 and 2018:
BREAKING DOWN 52-Week Range
Technical analysts compare a stock's current trading price to its 52-week range to get a broad sense of how the stock is performing relative to the past 12 months, as well as how much the stock's price has fluctuated. This information may indicate the potential future range of the stock and how volatile its price is. Most financial websites that quote a stock’s share price also quote its 52-week range. Sites like Yahoo Finance, Finviz.com and StockCharts.com allow investors to scan for stocks trading at their 12-month high or low. (To learn more, see: Getting Started with Stock Screeners.)
Current Price Relative to 52-Week Range
To calculate where a stock is currently trading at in relations to its 52-week high and low, consider the following example:
Suppose over the last year that a stock has traded as high as $100, as low as $50 and is currently trading at $70. This means the stock is trading 30% below its 52-week high (1-(70/100) = 0.30 or 30%) and 40% above its 52-week low ((70/50) – 1 = 0.40 or 40%). These calculations take the difference between the current price and the high or low price over the past 12 months and then convert them to percentages.
52-Week Range Trading Strategies
Investors can buy a stock when it trades above its 52-week range, or open a short position when it trades below it. Aggressive traders could place a stop-limit order slightly above or below the 52-week trade to catch the initial breakout. Price often retraces back to the breakout level before resuming its trend; therefore, traders who want to take a more conservative approach may want to wait for a retracement before entering the market to avoid chasing the breakout.
Volume should be steadily increasing when a stock’s price nears the high or low of its 12-month range to show the issue has enough participation to breakout to a new level. Trades could use indicators like the on-balance volume (OBV) to track rising volume. The breakout should ideally trade above or below a psychological number also, such as $50 or $100, to help gain the attention of institutional investors. (For further reading, see: How to Use Volume to Improve Your Trading.)