52-Week High / Low - Wrap Up

After looking at several indices - Dow Jones Industrial Average (DJIA), S&P500, Hang Seng Index (HSI) and Straits TImes Index (STI), it's quite fascinating to see how this strategy turns out on indices from different regions.

From the look of it, the market actions is quite like what been stated in our earlier blog topic "Introduction - 52-Week High / Low" posted on 7 May 2016.
 
When the market exceeds its 52-week high or low, it is not necessary the market actions continue it's preceeding direction but it may reverses.

Seeing that, it makes the analysis more challenging if one to use solely this strategy.

We also noticed the huge opportunities miss when one applies this strategy. Take a look at the chart below. 

(Posted earlier on 15 May 2016 under "52-Week High Low Case Study - Dow Jones Industrial Average (DJIA)").

During the US Subprime Mortgage Crisis, it made a low of 6,469.95 on 6 March 2009 and the market rebounded to 52-week High of 10,228.20 on 9 Nov 2009. 

A total of 3,758.25 points gained from the rebound.

Another example of chart (attached below) with huge points gained from the rebound in comparison to the 52-week High break out.

Big Fat Rabbit !
Huge opportunities not to be missed for long position traders.


Source : 
1) Metastock

52-Week High Low Case Study : S&P500

We shall take a quick look at S&P500.



52-week High 

A new High of 1,150.45 was recorded on 19 Jan 2010 after it achieved its 1st 52-week High on 11 Nov 2009.

That worked out with a gain of +45.08 points (+4.08%).


52-week Low

In this situation, we are not getting a new Low after it touched 1st 52-week Low. Instead, the market rebounded and made a gain of +121.73 (+9.6%).

A similar outcome with DJIA in our last two case studies.

Let us move on to the next market, Asia. 
To see how the Asian market price reacts toward this strategy.


Source :
1) Metastock