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Screen of the Week written byI know some are reluctant to buy stocks making new 52 weeks highs. If you're one of them, have you ever asked yourself why? If a stock is making a new 52-week high, that's a good thing.
I'm pretty sure that a person who dislikes buying stocks making new 52-weeks highs wouldn't be too upset if the stock he already owned broke out to new 52-week highs. And why should he? Statistics have shown that stocks making new highs have a tendency of making even higher highs. These are the stocks we all dream about. Get in and it keeps going up.
Of course the fundamentals need to be there. And you should keep a watchful eye on valuations. But if you were in a stock making new highs and cheering it on, it seems silly to be afraid of one doing the same just because you haven't bought it.
One question I like asking myself just to put things into perspective is: if I was in it, would I be excited and would I still want to be in it? If the answer is yes, then I'll look for the best opportunity to get in. If the answer is no, that I'd want to take profits, then I'll move on.
Can you imagine all the money you'd be leaving on the table if you were afraid of being in stocks every time they made a new high?
The screen I'm running today looks for…
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