NEW YORK (TheStreet) -- Buying a stock that is near a 52-week high is buying strength and going with the flow. Like a river, moving along with the flow can make your work much easier than trying to fight the market. For most investors, it's also more natural avoiding a contrarian view. The trick is not jumping into the river immediately upstream from a waterfall.
Historic stock performance indicates most stocks making 52-week highs continue to rise further. I have spent countless hours studying data on companies that are able to reach new trading levels and those that fail to continue higher.
While I haven't found a "magic bullet" if it's out there, I have found stocks with certain characteristics tend to have a higher performance ability than others. The result is a small group selected that are near or creating 52-week highs, and have the most favorable investor risk-to-reward ratio.
I use a filtering process that includes:
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV