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5 Stocks Near A 52-Week High To Place Your Bets On

The new administration’s optimism over the longevity of the eight-year Bull Market, the impressive rally of all major indices over the past six months and overall positive economic indicators reinstate our belief in the momentum investing rulebook.

The momentum investment strategy tends to bet on high-flying stocks in a bull phase. In this screening article, we focus on the 52-week investment strategy, which loosely borrows from the basics of momentum investing.

Being one of the relatively new investment techniques, the 52-week investment strategy banks on Wall Street’s current favorite catchphrase “buy high and sell higher.” Though skeptics may raise a brow on the mettle of this approach, a certain degree of caution is needed to avoid the pitfalls.

Rely on our screener to stop chasing fads blindly! Let’s take a look at how you could club other parameters with this strategy to turn the tide in your favor.

A Peek into 52-Week High Stocks

Stocks near 52-week highs often instill the presumptive “adjustment and anchoring bias” in the minds of investors. This principle works on the belief that investors use the 52-week high price as a reference point and value stocks against this anchor.

Many times, such stocks are prevented from scaling higher despite robust potential due to the psychological bias of investors who fear that the stocks are overvalued and a price crash is impending.

A few of the stocks remain undervalued due to prolonged under reaction on part of investors despite bullish growth drivers. Meanwhile, news pertaining to robust sales, surging profit levels, bullish earnings prospects and strategic acquisitions can drive stocks higher.

However, when a string of positive developments dominate the market, investors find their under-reaction unwarranted and the renewed interest might drive stocks beyond the 52-week high bar. Wall Street’s fast paced trading makes it imperative for investors to step in before the market gets a whiff of it.

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any...


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