As the old trader adage goes, "Buy Low. Sell High." But what if you consistently finding yourself buying high,  and selling low? According to Rich Smith of The Motley Fool in an article for MSN Money, the problem may be misunderstanding when trader sentiment has turned against a stock. When this happens, the key indicators supporting the bullish case for the stock may turn bearish. This may even be the case when the underlying fundamentals of the stock look good. To illustrate this point, The Motley Fool examines five high-flying stocks that may not be as attractive as they look.

All of the stocks are highly-rated by analysts, but four are in the oil & gas sector and one is a gold stock. While the run-ups in oil and commodity prices have been impressive, there will be a point in time when the trend will start to unwind. At that point in time, trader sentiment could shift quickly. For a gold stock, the worst-case scenario would be a "commodities bust."

Anyway, the same type of thinking and analysis can be applied to just about any stock that has recently reached a 52-week high. In the current market environment, it's important to understand the best-case -- as well as worst-case -- scenario for any stocks in your portfolio. By tracking trader sentiment (such as via the TradeKing Community), you may be able to prepare ahead of time for a reversal of fortune.

NOTE: Please keep in mind that TradeKing does not specifically endorse any of the securities or trading strategies mentioned. Depending on your risk-reward profile, this trade may or may not be suitable for your portfolio. The stocks mentioned are for educational purposes only.

[image: Brown Bear by longhorndave on Flickr]