52-Week High and Low

The 52-week high and low are the highest and lowest prices at which a security has traded over the previous 52 weeks, roughly one year or about 250 trading days. Together they form the 52-week range, a standard field in stock quotes, newspaper price tables and broker screens. Investors use them as a quick guide to where today's market price sits within its recent history.

The figures apply to any traded instrument, including stocks, exchange-traded funds (ETFs), bonds, commodities, currencies and indexes; for a mutual fund they are based on daily net asset value (NAV). They are descriptive, not predictive: a stock near its 52-week low is not necessarily cheap, and one near its high is not necessarily expensive.

Think of a thermometer in your garden that records the hottest and coldest temperatures of the past year. Glancing at it, you can tell whether today is a mild day or close to a record. It says nothing certain about tomorrow, but it gives today's reading some context.

The 52-week high and low do the same for a share price. They show the top and bottom of the past year's range, so a reader can see at a glance whether the price is near the year's peak, near its trough, or somewhere in between.

Data providers look back over a rolling 52-week window that moves forward each day. Most use the highest and lowest trade prices recorded during the session (intraday prices), though some publish ranges based on closing prices only, so figures from different sources can differ slightly. Prices are adjusted for stock splits and similar corporate actions so that the range stays comparable; they are generally not adjusted for ordinary dividends.

A common derived figure is the distance from the high:

Here $P$ is the current price and $H_{52}$ is the 52-week high. A stock trading at $80 with a 52-week high of $100 is $(80 - 100) \div 100 = -20\%$ below its high. The same idea, measured from the low, shows how far a stock has rebounded, and a fall of 20% from a high is the conventional threshold often used to describe a bear market in an index. The decline from a peak to a trough is also known as a drawdown.

• Context for a quote. Placing the price within its range helps a reader judge recent volatility; a wide range relative to the price signals a stock that has moved a lot.
• Momentum and breakouts. Technical traders treat a move to a new 52-week high, especially on heavy trading volume, as a sign of strength, and often read it alongside indicators such as the golden cross or the relative strength index (RSI).
• Support and resistance. Some traders expect prices to stall near a previous high or low, because many market participants watch the same levels.
• Bargain hunting. Followers of value investing sometimes screen for stocks near their lows as a starting point for research, while bearing in mind that a brief rally from a low can be a dead cat bounce.
• Market breadth. The daily count of stocks making new 52-week highs versus new lows across an exchange is used as a gauge of how broad a rise or fall in a stock market index is.

Academic work has found that the 52-week high carries information. A widely cited 2004 study by Thomas George and Chuan-Yang Hwang in the Journal of Finance reported that stocks trading close to their 52-week highs tended to outperform those far from them, and linked this to anchoring: investors treat the high as a reference point and are slow to bid prices above it when good news arrives. The finding is one of several momentum effects studied in finance, and like other such patterns it varies across periods and markets.

The 52-week window is arbitrary; a stock that collapsed 13 months ago will show a misleadingly narrow range. The range says nothing about value, since a company's earnings may have changed sharply within the year. A stock that hits a new low may keep falling, and one at a new high may still rise further, so the figures are no substitute for valuation or for the discipline of avoiding market timing. In thinly traded securities, one unusual trade can set a high or low that does not reflect normal price discovery. The range should be read with the ticker's full price history rather than on its own.

• Investor.gov: Closing price