The 52-week low is the lowest price a transaction has occurred at in an asset over the last 52-weeks (approximately one year, so it is also called the yearly low).
Further Explanation of the 52-Week Low
Whether an asset is trading near, or creating a new, 52-week low gives traders insight into how the asset is performing relative to the last year. An asset that is near the 52-week low is showing weakness, as the price is near the lowest level it has been all year. A price that continually makes new lows is in a downtrend because the price is continually pushing lower. When the price is not near its 52-week low it means it is stronger than it was at some other point in the year.
Some traders view an asset at a yearly low as a bad thing, and don’t buy assets which are trading near lows. An asset needs to fall to reach a 52-week low, so the thinking is that the asset will continue to fall.
Other traders view a asset that is trading near a 52-week low as a possible trade opportunity, since the price is near the lowest levels of the year and may offer some value relative to where the asset was priced at other points in the year.
The 52-week low is not a definitive signal to trade or not to trade; it is simply the lowest price over the last year. How traders interpret it is up to them. The one year time frame is not relevant to all traders. A day trader for example, who places trades that last minutes or even seconds, will gain little insight from knowing the 52-week low of an asset. A long-term investor, holding positions for 10 years or more, may also have little interest in the yearly low. They may be more interested in the low price of an asset over the last several years. For traders taking trades that last weeks, months or a couple years, the 52-week low may be relevant as it provides trading opportunities (if the trader has a strategy for trading near yearly lows) over those time frames.
Further Reading On This Topic
The following articles are loosely based on the 52-weeks low, or provide a greater understanding of how prices move.