As any reader of this probably knows, the actions of Entain (LON: ENT) are currently trading near a 52-week high as the stock price has risen by around 1.30% at 1835p over the past week. On a monthly basis, the Entain the price has increased by 16.2%.
For investors owning the stock (or considering buying it), the question is: and now?
A popular market indicator is 52 week highs. But research shows investors may be wondering what to do when this happens when a 52-week high is hit. Here’s a look at what academic research is saying …
GET MORE DATA-BASED INFORMATION ON LON: ENT Â»
What happens when a stock hits a new high?
52 week highs are always good news. But surprisingly, the prices of top performing stocks can be slow to move when they release positive earnings information.
Why is it? Research shows that investors are becoming cautious about offering their top performing stocks, even if they deserve it. Psychologists call it anchor. As humans, we tend to take our time when it comes to changing our opinions in the face of new information – even when it is good news.
This emotional tug-of-war often ends with a rise in the price of ânew highâ stocks in the weeks and months to come. The upward trend is called âdrift after earnings announcementâ. As the news comes in the momentum takes over and the price goes up more and more, as the fear of failing sets in.
A look at Entain’s StockReport could offer more information on what is driving its stock price momentum – and if it could continue. What we do know, however, is that statistically speaking, prices continue to rise after hitting a new 52-week high – which may be a reason to halt any immediate sales plans.
As always, take a look at Entain’s StockReport to learn more about what drives its own momentum – and always do your own research before deciding to trade a stock.
What does this mean for potential investors?
With Entain trade near a 52 weeks high, investors in the market may not know where the price will move next. It is important to remember that momentum in itself is not a guarantee of future returns.
To get a better idea of ââhow this trend continues, it’s worth investigating yourself. Indeed, we have identified some areas of concern with Entain which you can discover here.
Alternatively, if you want to find more stocks that are trading near new highs, you can find them on this 52 week screen.