Barry over at The Big Picture offers some very simple, but very solid, trading advice:
…there is never a reason to buy a stock making a 52 week low. Never.
OK, so you can better understand both the point of my statement, as well as the philosophical underpinnings of this, here’s the thinking (and I’ll use small words so even the emailer can get it): Any stock making 52 weak lows will ALWAYS be technically weak, and there undergoing a (possibly massive) institutional distribution. EVERYONE.
When will the hedge funds, pension plans, mutual funds and foundations be done selling? How the hell can you tell? I sure can’t.
Barry’s right. Listen to him. Buy strong stocks – not weak ones.