When a stock trades at or near its 52-week average, it can be a sign of bullish momentum. Many investors consider 52 weeks to be a significant length of time to compare a stock’s price performance to its near-term prospects. If the stock is rising because of forthcoming catalysts, hitting a 52-week high can be just the beginning.
Part of the attraction of buying stocks that are trading near their 52-week highs is psychological. Many investors see this as a bullish indicator and will bid the stock higher.
