There goes IBIT, moving into new 52-week highs
William O’Neil’s research found that, during bull markets, stocks making new highs tended to keep moving higher. The strongest opportunities emerged when price broke out of a sound base with strong volume. What looked “too expensive” to many investors could be the beginning of a substantial advance.
Nicolas Darvas built his approach around a similar principle. He watched stocks consolidate within a defined box, then bought as price broke into a higher range. He deliberately sought strength near new highs, allowing the market to demonstrate demand before committing his money.
A new 52-week high puts the entire past year’s trading range beneath the current price. Buyers have absorbed the selling encountered along the way. Why is this important? Because investors trapped at higher prices can create resistance when they finally get an opportunity to sell near breakeven.
That’s what makes IBIT’s move worth paying attention to. The next evidence is whether the breakout holds, and follows through.
