A Look at Funds Hitting 52-Week Highs

It's true that what goes up must come down. But hopefully it won't come down right away. In fact, positive momentum can allow what's going up to rise further before gravity asserts itself.

Big money is made and lost trying to call a bottom or top. The safer bet is to not fight the market, making the trend your friend. This means waiting for a new trend to be established or looking for break-outs into uncharted territory.

On April 9, we looked at fundamental factors to discern the valuation of ETFs, which led us to ask: "Which funds look hot from a technical analysis point of view?"

Three factors were applied to narrow down the huge list of mutual funds to those that may be considered bullish from a technical analysis standpoint.

First, the funds must have reached a new 52-week high within the last five days. Second, the five-day moving average must be above the 10-day moving average. Third, the moving average convergence-divergence indicator had to have given a new "buy" signal in the last 10 days.

We came up with four funds that met this criteria.

The first is the (IAF)Aberdeen Australia Equity Fund (IAF). This closed-end fund holds 22 Australian stocks and one New Zealand telco. Aberdeen set a new 52-week high on April 9. In the last five days, several of the fund's holdings had gold stars performances, including increases of 4.11% by Downer EDI, 6.82% by ASX Ltd., 4.76% by Westfield Group and 8.44% by Leighton Holdings.