Aggressive Stock-Picking, Week 1: How to Trade 52-Week Lows

Editor's note: The Aggressive Stock-Picking Training Program is a series of six weekly assignments. Each assignment is based on one of James Altucher's strategies in his book, Trade Like a Hedge Fund. To get a copy of the book, click here.

This assignment was written by Stockpickr member Ira Krakow.

The most obvious advice for trading stocks is "buy low, sell high." So why not start with stocks that are hitting their 52-week lows, pick those that have been unjustly beaten down (and are due for a rebound) and buy them? Indeed, variations on such a strategy are part of the arsenal of many a hedge fund professional.

Psychologically, buying a stock when it's at its low is difficult. The doom and gloom about the company is everywhere, from the office water cooler to the television news. If you're buying the stock as it hits its 52-week low, frequently you're going against your gut instincts, as well as the opinions of all your friends. That's where it pays to put on that green eyeshade and calmly analyze the situation. Many times what appears to be the perfect storm is in fact the perfect buying opportunity.

Here is your first professional-grade assignment as a hedge fund trader in-training: Pick the best stock buy on the 52-week low list.

Step 1. Check out the latest 52-Week Low Portfolio on Stockpickr. Read the "Reason for picking" box for the first five stocks in the portfolio to see why each stock made the list.

Step 2. Build a Stockpickr portfolio of these five stocks. Title your portfolio "52-Week Low Analysis: [Your Stockpickr Username]." (To create a portfolio on Stockpickr, you'll need to first log in. If you're currently not a Stockpickr member, you can register at www.stockpickr.com/register.)

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