52 week low

What is a 52 week low?

A 52 week low is the lowest price at which an asset has been traded over the prior 52 weeks.

This information is important to some investors, who might see it as an indicator to be used as part of their investment strategy.

How does a 52 week low work?

Almost all stock exchanges have operating hours during which trading takes place. The London Stock Exchange, for example, is open for trading from 08:00 AM until 04:30 PM.

The final price at which a stock can be bought during trading hours is known as the ‘closing price’. This is the price which people generally use to determine if a stock has reached a 52 week low.

Analysts will look at the closing price of a stock and compare it to all the other closing prices that the stock has seen over the prior 52 weeks. If it is lower than all the other numbers, that will mean it’s a 52 week low.

Why is a 52 week high important?

There is a lot of debate as to how meaningful a 52 week low actually is. It’s generally seen as an indicator for traders using technical analysis.

Even amongst those that do believe 52 week lows hold some meaning, there is uncertainty as to how it should the investment decision-making process.

Some people argue that the negative sentiment which drove a stock to fall in value is likely to continue and it will fall lower.

On the other hand, if the stock bounces back then people might see that lowest price as a bottom beyond which the stock is unlikely to fall in price. That may cause some people to buy at that price if it dips down to it again.

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