Mar 2, 2016

Posted by in Stock Reports | 0 Comments

Should Investors Continue Betting On These Stocks: General Electric Company (NYSE:GE), J. C. Penney Company Inc (NYSE:JCP), The Coca-Cola (NYSE:KO)

Should Investors Continue Betting On These Stocks: General Electric Company (NYSE:GE), J. C. Penney Company Inc (NYSE:JCP), The Coca-Cola (NYSE:KO)

Some contrarian or deep value investors like to buy stocks making new 52 week lows in the hope of a turnaround. Others prefer to ride the wave of momentum when stocks are soaring to new 52 week highs. Is the strategy of buying high-fliers a sound one? Which stocks should you consider buying?

Soaring stocks can have two separate effects that boost share prices. The first is momentum – stocks which have beat the market over the past 52 weeks generally do so over the following year.

On the other hand, the theory behind the “52 week high effect” is that investors become hesitant when prices near 52 week highs. Share price valuations compress at this “anchoring point,” which is merely a psychological barrier. When prices finally do break through, a nice run of excess gain may follow. Buying stocks that are at 52 week highs is a valid back-tested strategy based on anchoring bias from investors. What are a few stocks reaching new highs now that you may want to look at?

Shares in General Electric Company (NYSE:GE) have by -3.31% year to date and are now trading -4.35% below their 52-week high, at a price of $29.88. It has shown a growth of +2.54% in the past session on when approximately 32.27 million shares were traded, against the average daily trading volume of 50.82 million. The stock failed to get pushed above the $29.97 barrier, the intraday high. Analysts have a consensus target price of $32.36 in the 12-month period.

J. C. Penney Company Inc (NYSE:JCP) currently trades at $10.18 which is only about -0.49% lower than the 52-week high of $10.23. The trading volume at ready counter moved to 20.94 million shares as compared to 14.46 million shares average traded volume. The stock failed to get pushed above the $10.28 barrier, the intraday high, after opening at $10.20. Analysts have a consensus target price of $10.00 in the 12-month period. Its market capitalization has now reached to $3.12 billion.

The Coca-Cola Company (NYSE:KO) is now -1.11% below its 52-week high level. The share price was up 1.30% from the previous closing rate after touching an intraday high of $43.69. The stock’s low point in its 52 week range is $35.97 per share, with $44.18 as the 52 week high point — that compares with a last trade of $43.69. Comparing the most recent share price to the 200 day moving average ($41.73) can also be a useful technical analysis technique. Trading volume was at 12.34 million shares versus an average volume of 14.88 million shares.

 

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