52-Week High Low Case Study - Dow Jones Industrial Average (DJIA)

In the last posting, it was stated as follow:

"A popular strategy used by stock traders is to buy when price exceeds its 52-week high or to sell when the price falls below its 52-week low."

We select DJIA market performance during US Subprime Mortgage Crisis 2008/2009 to study the strategy. Attached below is Dow Jones Industrial Average (DJIA).

During the crisis, DJIA recorded it's lowest of 6,469.95 points on 6 March 2009.

Thereafter, the market rebounded.

DJIA recorded it's first 52-Week High of 10,228.20 points on 9 Nov 2009 and the market continued to move upward and recorded a new high of 10,729.90 points on 19 Jan 2010.

Net gain of +501.70 points (+4.91%) based on this strategy.



Take note that the market recorded a huge gain of +3,758.25 points (+158%) from 6 March 2009 to first 52-Week High.

Source : Metastock