From Trading Quotes:

“They say there are two sides to everything. But there is only one side to the
stock market; and it is not the bull side or the bear side, but the right side.”

Jesse Livermore

52 week highs and lows are very important inflection points that can reveal where the right side will be. Sometimes traders are able to find jewels in set ups that are not exactly at the high or the low of the year – but close. In recent talks with some of our high end users in New York we modeled two new strategies that deal with movements around the 52 week highs and lows. We share modified versions of them with you.

The first strategy finds stocks that are breaking down after recently making 52 week highs. For momentum players this may be a candidate for a short sell, for swing traders this may flag buying opportunity in hopes that the stock will return and test the 52 week high point.

Stocks Coming Off 52 Week Highs

The inverse of this strategy looks for stocks making a move after hitting recent 52 week lows. This may be an opportunity to catch a near term low and see if there is momentum behind a possible rally – in other words – a good entry point.

Stocks Bouncing off 52 Week Lows

Footnotes:

• Link to other Strategy Sessions here.
• Remember that these set-ups are sketches meant to give you an idea how to model your own trading plan. Use this ‘as is’ or modify it to your own liking as many others do. Know, however, that Trade-Ideas.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, alerts and all other features are for research purposes only and should not be construed as investment advice.
• June Seminar Footnote – To gain a full understanding of how this strategy and others can help you in your trading plan, we suggest you attend our training seminar in June. There we will focus on all the advanced aspects of our software needed to give you an edge against larger, more capitalized participants. We just opened the sign up page so that you can officially pay for and reserve your spot (conference limited to 100 existing subscribers). https://trade-ideas.54solutions.com/Seminar/