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Do stocks at 52 week highs keep rising? A backtest

Buying strength at new highs is a classic momentum idea, and research from the early 2000s found that stocks near their 52 week high tended to keep outperforming. We tested new 52 week highs on heavy volume in liquid US stocks from mid 2018 to May 2025.

No edgeNew 52 week highs on heavy volume did about the same as the average stock over the next month.
Signals12,350
Vs the average stock, 20 days−0.05%
Trades that made money53.4%
Median trade+0.6%

Breakouts to new highs were slightly more likely to rise than fall, but so were other stocks: the market rose over this stretch.

The rules we tested

  • Signal: the close is above every close of the previous 252 trading days, a new 52 week closing high.
  • Volume: at least 1.5 times the 50 day average.
  • Entry: buy at that close. Exit: sell 20 trading days later.
  • Stocks: US stocks above $10 trading at least $20 million a day on average, including companies that later stopped trading.
  • Judged against: the average eligible stock over the same days, after a 0.1% round trip cost, and against random stocks bought on the same day.
52 week high breakouts by year, against the average stock (20 days)
0%+0.54%2018+0.40%2019−0.05%2020−1.01%2021+1.03%2022−0.52%2023+0.76%2024−1.85%2025*

*2025 runs to May.

Ranking by nearness to the high

We also tested the version from the research: each month, the 10% of stocks closest to their 52 week high. It lagged the average stock by 0.10% a month from 2018 to April 2025, and by 0.46% in the 18 months after that. Ranking by 12 month gains did better than ranking by nearness to the high.

The most recent 18 months

In the most recent 18 months, which we held back and checked separately, the same rules gave 3,691 trades and +0.47% against the average stock, with 54.7% of trades making money. That is not enough to tell apart from luck.

What it means for your trading

  • A new high is not a buy signal on its own.
  • Strength measured over 12 months held up better than a single breakout day.
  • Near 52 week highs is useful context, which is how the Stock Scanner shows it.

Limits: daily closes from mid 2018, which includes one bear market (2022). Results are averages over thousands of trades; any single trade can do far better or worse.

Near 52 week highsThe Stock Scanner lists them every night, ranked by 12 month strength.Open →

52 week high breakout questions

Is buying 52 week highs a good strategy?

Not on its own in our test. New highs on heavy volume did 0.05% worse than the average stock over the next 20 trading days.

Do stocks near their 52 week high outperform?

Not since 2018 in our data. The 10% closest to their highs lagged the average stock slightly.

What worked better?

Ranking stocks by their 12 month gains, leaving out the most recent month. That held up best of everything we tested.

Related tests

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Backtest results are hypothetical. They are based on historical prices, include a simple trading cost and leave out taxes and other costs of real trading. Past results do not guarantee future returns. For informational and educational purposes only. Not investment advice, and not a recommendation to buy or sell any security.