52-Week High Low Case Study : DJIA Part 2

In the last post, we looked at 52-week High on Dow Jones Industrial Average (DJIA) during US Subprime Mortgage Crisis 2008/09.

In 2nd part of DJIA, we shall look at 52-week Low.

DJIA recorded its 1st 52-week Low of 11,634.82 points on 22 Jan 2008. Instead of continuing downtrend, it rebounded to a high of 12,767.74 on 1 Feb 2008.

A gain of +1,132.92 points (+9.74%).

This price action aligned with the alternative strategy which was stated during our introduction of 52-week High Low, as follow:

"Alternatively, another strategy is to sell when price reaches its 52-week high on the assumption that price will recede, or to buy when price reaches its 52-week low in anticipation of a value play."

Take note that the market lost -2,563.28 points (about -18% ) from its high of 14,198.10 points on 11 Oct 2007 to its 1st 52-week Low on 22 Jan 2008.

If we continue forward, we will make an interesting discovery that the 1st 52-week Low was not the lowest point DJIA hit during the crisis. DJIA touched its lowest point of 6,469.95 points on 6 Mar 2009.
 
In the coming posts, we shall look at S&P500 and some Asia markets indices before we conclude 52-week High/Low strategy.


Source :
1) Metastock
2) www.investopedia.com