Shares in Amryt Pharma Holdings (LON:AMYT) are currently trading close to a 52 week high, with the share price up by around 0.000% to 154.7499 over the past week. On a one-month basis, the Amryt Pharma Holdings price has risen by 27.1%.
For investors holding the stock (or considering buying it), the question is: what now?
52 week highs are a popular market indicator. But research shows investors can be left wondering whether to sell the stock and take a profit or buy more and ride the uptrend. With this in mind, here’s a primer on what you should know about stocks hitting ‘new highs’...
What happens when a share hits a new high?
52 week highs are always good news. But surprisingly, the prices of high performing shares can be slow to move when they publish positive earnings news.
Research shows this happens because investors are cautious about bidding high performing shares any higher (even if they deserve it). Psychologists call this anchoring. As humans, we tend to take our time when it comes to changing our opinions in the face of new information - even when it's good news.
This emotional tug-of-war often ends with the ‘new high’ stock drifting higher in price over the coming weeks and months. The upward trend is called “post earnings announcement drift”. As the news sinks in, momentum takes over and the price moves higher.
A look at Amryt Pharma Holdings’s StockReport could offer more insight into what’s driving the momentum in its share price - and whether that might continue.
Next steps
With Amryt Pharma Holdings trading close to its 52 week high, it’s possible that investors in the market are uncertain about whether to buy, hold or sell it. This uncertainty can cause erratic pricing in the short-term before momentum takes over - and it’s worth considering this before making your own trading decision.
Disclaimer: These articles are provided for information purposes only. The content is not intended to be a personal recommendation. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. The author has no position in the stocks mentioned, unless otherwise stated.