The good news for any holders of B&m European Value Retail Sa (LON:BME) is that the price is currently trading close to a 52 week high, with the share price up by around 2.18% to 444.5 over the past week.
For investors holding the stock (or considering buying it), the question is: what now?
On a one-month basis, the B&m European Value Retail Sa price has risen by 15.2%.
Research shows investors can be left wondering whether to sell the stock and take the profit or buy more and ride the uptrend.
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.
With B&m European Value Retail Sa 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.
To find more stocks that are trading close to their 52 week highs, you can explore this constantly updated 52 Week Highs screen, which covers all the ‘new highs’ in the market.