52-Week High Trading Strategy (Backtest And Example)

For many, the approach is to buy low and sell high. But that is not the case with the 52-week high trading strategy – you do the opposite. What is the 52-week high trading strategy?

The 52-week high strategy is a method of investing that seeks to buy stocks that are trading close to their 52-week highs because they have been shown to outperform the ones that are trading far away from their 52-week highs. The strategy goes against the intuitive “buy low and sell high” mantra.

In this article, we look at both backtests of individual stocks and the main index (S&P 500).

Before we continue, let’s find out what the 52-week high means.