Thank's everyone for their reply. I posted some stats on our href=http://www.stockpickr.com/problog/33/>blog.

PSYS is a good example of why to buy high. The company is undoubtably living on borrowed
time: the ONLY way the company can grow long term is by buying others who do the same
things that is does. The PE should be in the 8-12 range eventually, but until then, it
will trade like it is a tech stock, with unlimited upside potential. But traders are using
the "buy high sell higher" model, and are snapping up at even a premium to its current
temporary growth burst. The company is insanely overvalued, as Krispy Kreme was many years
ago. And it was every month that it went up 10% for many, many years. But eventually,
reality will set in.

Every time I buy at all-time highs or in range, everyone says I am PSYS! LOL! They say
things like "It can't possibly go much higher. It has to come down. It is extended. It
is overbot. If that is an IBD 100 stock, watch out below!".

*sigh*

I feel like such an outcast... LOL! A profitable one tho. :)

buy high sell higher paul cartonia

I want all-time highs, but in the end it comes down to the exits. A case can be made for
both strategies but smaller investors are likely better off holding the strongest stocks.

52 week highs are not something I think has enough significance in trend following.

I'll take the highs also. Many successful screening methods incorporated and tested over
time by AAII have found relative strength to contain useful information, and many of my
most successful investments are purchased at or near highs - although I try to catch a
small pullback if I can. I do buy for longer terms than 1 month holding times though.

If a stock is tanking I'd rather that it find it's own level before I step in. I've been
in enough of the sinking ships to know that at a certain point disgust sets in and I want
to be rid of a holding regardless, and I'm thinking that negative sentiment may be highest
amongst 52 week lows, and there should be a shaking out phase between new buyers and
disgusted sellers that can take a while.

Assuming you'd like the value of the stock you buy to increase, I would go with 52 week
high, for one very important reason: you aren't investing based on corporate performance,
you are SPECULATING based on nothing more than the tempo of traders. Over the course of a
month, the price of stocks do not relate to corporate performance. Thus, how well the
company is doing is irrelevant, unless perhaps earnings are announced that month, and you
somehow are able to accurately predict the future, which no one can do. What IS important
is the trend, and your hoping to catch another month of a stock that is on a good run.
While selecting the stock on a 52 week low would probably be best in the long-term
(assuming the company is in good shape, has a good future earnings outlook, etc.), over a
month, the 52 week high is your best bet. (Warning: this is for discussion only. NO ONE
should ever buy a stock with intentions of selling it in a month.)

Interesting question, although the idea of holding a stock for a month (at this point in
my investing career--can't afford yet to be a trader, just a buy and hold guy) is a tough
one to imagine.

Still, I'll take the one on the 52 week high for a few reasons....

1) Don't underestimate the value of momentum in the short term--which could be a for the
52 week high stock, and a - for the 52 week low
2) For your 52 week low stock, there's probably a fundamental reason as to why its hitting
rock bottom (although here is the point that if I'm a long term investor, I'm looking at
this for a value opportunity)--bad sales numbers, too much debt, increased competition,
etc.

Like I said, gimme the 52-week high stock to hold for the month.

Hooboy

Out of all the stocks in the S&P 500, if you had to buy a stock and hold it for a month,
would you rather buy a stock trading at a 52 week high or a stock trading at a 52 week
low? and why?