Why 52-week lows are important
What is a 52-week low? To me it’s just an indicator. This is the low bound of the price range of a give stock over a rolling calendar year. Why is this indicator important? It allows me to make a common sense investment decision consistently.
I try to look at stocks close to it’s 52-week low and trending up. For example, think about this. When the BP well exploded in the gulf. That is a PR nightmare, and there will be a natural reaction. Most investors will either sell their BP shares or try to wait it out. Because of the people closing there position. The value will drop, but overtime the price should recover. This why I like 52-week lows.