I posted this in the DTT but I think it is relavent here to. It's to do with what happens to stocks that hit their 52 week high. Thanks to
@Ravgnome who posts scans every night in the DTT, I took a random sample. I hope you find it interesting...
I was a bit curious about
@Ravgnome's 52 week high list and what happens to those stocks. I chose a couple of random days in January (24th and 25th) and did some statistical analysis on those stocks. I removed the ETF units etc and looked only at the single stocks. There were 31 stocks for those two days. I then looked at what they closed at on Friday 22nd Feb. Here is what I found.
31 stocks - 18 were up and 13 were down giving 58% success rate. If you traded every stock at the same trade value (eg. $3k on each stock) and based on the percentage of increase or decrease of each stock, your return for the month would have been 1.76%. Not very exciting
Then, I took out all the stocks less than $1.00. So that gave us:
19 stocks - 13 up and 6 down giving a 68.4% success rate. This time if you just traded these stocks (equal value again), your return would have been 6.51%. Well this looked better
Then, I took out all the stocks less than $5.00. So that gave us:
8 stocks - all 8 were up giving a 100% success rate. This time if you just traded these stocks (equal value again), your return would have been 13.31%. Looking much better!
This peaked my interest so a checked a few other random dates around the same time in January and this was the result. (same parameters as before).
Jan 21st: 17 stocks - 9 up, 4 equal and 4 down. Success rate 52.90% and a trading return of 6.54%
Taking out those under $5.00: 6 stocks - 5 up and 1 down. Success rate 83.30% and on trading 8.91%.
Jan 29th: 19 stocks - 12 up and 7 down. Success rate 63.15% and a trading return of 5.61%
Taking out those under $5.00: 7 stocks - 6 up and 1 down. Success rate 85.70% and on trading 8.61%.
Jan 31st: 23 stocks - 17 up and 6 down. Success rate 73.90% and a trading return of 6.81%
Taking out those under $5.00: 5 stocks - 4 up and 1 down. Success rate 80% and on trading 4.86%.
(Disclosure: I do not own any of the stocks and this is purely as an information only (because I was curious). While I think the calculations are correct, I may have made mistakes Thanks again
@Ravgnome for the scans )
(20min delay)
