Despite the market volatility, shares in Ergomed (LON:ERGO) have been in an uptrend in recent months. The question now for investors is whether that price strength will continue.
Finding stocks with the potential to break-out as their popularity grows is a strategy used by some of the world’s most successful traders.
Knowing what drives relative strength in share prices can help you find profitable momentum trades...
How has the Ergomed share price performed?
In terms of relative price strength the stock has performed well against the market over the past year:
- 1 Month: 17.9%
- 6 Months: 108.2%
- 12 Months: 209.5%
Relative strength is a useful tool in the armoury of technical traders and investors. It’s an instant measure of how a stock has performed in comparison with a benchmark.
And while there are no certainties about which way a stock will move next, research shows that price trends like this often persist.
Studies by leading experts on momentum show that stocks with the strongest price strength tend to keep up the pace for anywhere up to one year, as investors increasingly buy into them.
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.