Swing trading is a strategy that involves buying and selling stocks based on short-term changes in their prices over a few days or weeks. Traders aim to profit from both upswings and downswings in stock prices, with positions typically held for up to six days, or even a few weeks if profitable.
In the stock market, breaching the 52-week high or low levels (i.e., the highest or lowest price a stock has reached in the past year) is a critical indicator. Crossing these levels is seen as confirmation that the trend is likely to continue in the same direction, with increased momentum.
Investors and traders believe that breaching the 52-week high or low indicates a strong underlying strength or weakness that could lead to a sustained movement in that direction. In general, the 52-week high represents a resistance level, while the 52-week low represents a support level. Breaching either level is considered key to the trend’s continuation.
The “52-week high effect” suggests that stocks near their 52-week highs have better subsequent returns than those far from their 52-week highs. Investors use the 52-week high as a benchmark against which to value stocks. When a stock price is near its 52-week high, investors are reluctant to bid the price up to its fundamental value. As a result, they tend to underreact when the stock price approaches the 52-week high, creating the 52-week high effect.
Here is a list of Small Cap Stocks and the percentage by which they are away from their respective 52-week highs. You should add stocks that have seen a dip of up to 10-15% to your portfolio.
Below are the List of Stocks which are part of Small Cap Stocks which are trading near its 52 Week High.