52-Week High: does it work?
Stocks trading close to their 52-week high are said to keep outperforming, because investors anchor on that level and under-react to good news. It is one of the best-known momentum variants.
The rule we tested. Rank assets by how close each sits to its 52-week high and hold the nearest ones, tested long-only on US stocks and as a top-three rotation across sector ETFs.
- Nearness to 52-week high, long-only (wide US stocks) (171 US stocks (AAPL, NVDA, AVGO, ORCL, …)), 2016-09-15 to 2025-03-14, costs 0.05% per side: −6.7 pts/yr vs the benchmark across 90 changes to the portfolio holdings (not completed trades), unadjusted p=1.000, BH-adjusted q=1.000: did not beat the benchmark.
- Sector ETF nearness to the 52-week high, top 3 (11 ETFs (XLK, XLF, XLE, XLV, …)), 2016-09-15 to 2025-03-14, costs 0.05% per side: +0.7 pts/yr vs the benchmark across 70 changes to the portfolio holdings (not completed trades), unadjusted p=0.388, BH-adjusted q=1.000: beat the benchmark on the raw number, but not significantly.
These versions did not pass these tests. US stocks −6.7 pts/yr vs the benchmark (unadjusted p=1.000, BH-adjusted q=1.000); ETFs +0.7 pts/yr vs the benchmark (unadjusted p=0.388, BH-adjusted q=1.000). None cleared Tickfloor's Benjamini-Hochberg q<0.10 bar once weighed against every other rule tested alongside it. This describes the tested implementations, the costs and the benchmark stated here, not every version of the rule. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
This is one line in a wider check: Tickfloor's research desk has run 517 strategies, most of them against an equal-weight benchmark of the same assets rebalanced daily that pays no costs (the strategies pay theirs), and after correcting for how many were tested (Benjamini-Hochberg, 598 tests), 0 passed. That does not prove no strategy works, and it says nothing about untested versions of a rule. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.
Does buying near the 52-week high work?
These versions did not pass these tests. US stocks −6.7 pts/yr vs the benchmark (unadjusted p=1.000, BH-adjusted q=1.000); ETFs +0.7 pts/yr vs the benchmark (unadjusted p=0.388, BH-adjusted q=1.000). None cleared Tickfloor's Benjamini-Hochberg q<0.10 bar once weighed against every other rule tested alongside it. This describes the tested implementations, the costs and the benchmark stated here, not every version of the rule. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
What exact rule did Tickfloor test?
Rank assets by how close each sits to its 52-week high and hold the nearest ones, tested long-only on US stocks and as a top-three rotation across sector ETFs.
Is this financial advice?
No. This measures a publicly claimed strategy rule, not a recommendation. General information only, not personal advice.
See the full numbers on the Equity factors, Momentum family pages, or the full method and every result.