We also saw a decent correction in small cap stocks last week, and a few high-quality small cap stocks are back in the buying range based on 52 week highs.
52-week highs/lows, where a stock or index breaks above a one-year high/low, are vital indicators in the markets as a breakout of these levels is seen as confirmation that the trend is likely to continue, with ferocity, in their respective direction.
Investors and traders believe that the stock has broken a 52-week high or low with consistent fundamental strength/weakness, which could lead to a secular movement in the counter. In general, the 52-week high represents resistance and the 52-week low represents support levels, and breaking through it is key to the continuation of the trend.
52 weeks big impact in stocks
The ’52-week high effect’ indicates that stocks whose prices are close to 52-week highs have better subsequent returns than stocks whose prices are far from 52–week hikes. Investors use the 52-week high as a “full point” against which they rate stocks. When stock prices approach a 52-week high, investors are unwilling to bid on the price down to the underlying value. As a result, investors are affected by weak reactions when stock prices approach their 52-week high, and this creates the 52-week high effect.
Below is the list of stocks for the Small Cap Index and the percentage away from its 52-week high. Shares that have experienced a decline of up to 10-15% should be added to the portfolio. Link to Google Chit