Is it ok to buy a stock when it's at it's 52 week high?

Question

Or is it just going to drop because eveybody is going to sell when it's high?

Answer 1

Some people will tell you it's too late. I'm a momentum trader...  that's the time that I think is best.

Based on the wrong thinking;

GOLD should not have been bought after $600

Oil should not have been bought after $100

GOOG should not have been bought after $510

SOL should not have been bought after $17

POT should not have been bought after $150

The real answer is with you. Start by reading books like;

Trading In The Zone, Mark Douglas

Mastering The Trade, John Carter

Answer 2

Some of the most successful traders got that way by buying only on new highs.  This is sometimes called buying a breakout.  52 weeks is easy to find in the paper, but there's nothing special about 52 weeks.  You can do new 20 day highs if you want.  It's whatever time frame you feel comfortable with.

"Buy low and sell high" is a common saying.  It also makes no sense.  If you do that, you're buying things that are going down and selling them when they start to go up.  Yes, some things do reverse and you can make some money this way, sometimes, but in the long run your account will get drained.  You should "buy high and sell higher".

Answer 3

The best time to buy is when the price is down, so the best time to sell is when it is high. The risk is entirely yours, buy or sell.

Answer 4

If you are trying to trade a  stock, you need to have and educated opinion about where it is going next. The fact that it is at it's 52 week high is irrelevant. The only thing relevant is that your opinion be truly educated.

Answer 5

Depends on the company, are they making money or is it just a darling today?  If it is making $$$ buy it.

Answer 6

Do your own research into the companies prospects .,.

Then you will be able to answer that for yourself ..

Answer 7

Yes, under certain conditions.

You should have a plan in place before you make any trade, however, and looking for feedback or confirmation from Yahoo! Answers is not a sufficient trading plan.  I am sure that the other people who answered and who are actually traders would agree.

Answer 8

You always buy stock on an uptrend, so if the stock is trending, go for it.

No every one sells when the stock meets a new high, if they did there would never be a new high (think about it)

Yes you will get some sellers, but if there volume, the stock will move right pass the new high.

Remember one of the cardinal rules of trading/investing, Never enter a buy order unless you know when and where you are going to get out.  Always use stop orders.

Answer 9

Oh, its definitely OK to buy a stock at its high - the real question is whether the risk/reward ratio is in your favor.

That's why a lot of traders and fund managers look at various technical indicators - like RSI, Momentum, etc.

If the stock is healthy, has a good future, and strong momentum, then buying at a high may be a good play.

There are schools of thought on both sides of the fence, and both sides have legitimate arguments, so the final decision is really up to you, the buyer.

Answer 10

Yes if the company is growing and all the indicators look good. Remember, all $100.00 stocks were at 52 week high when they passed the $80.00 mark  for the first time right?  Let's say you look at a  stock when it's at $60.00. Everything looks good and you buy in at that level. When it hit $80.00 on the way up if you sold it you would have missed out on another 33% profit on your original investment of $60 if it had gone to $100.00.