Allergy Therapeutics (LON:AGY) cover image
295 Reads (2 mins read)

Allergy Therapeutics (LON:AGY): buy, sell or hold?

14th Sep by Ben Hobson

Shares in Allergy Therapeutics (LON:AGY) are currently trading close to a 52 week high, with the share price up by around 7.25% - to 35.5p - over the past week. On a one-month basis, the Allergy Therapeutics share price has risen by 20.3%.

For investors holding the stock (or considering buying it), the question is: what now? Is it best to buy more and ride the uptrend, sell and take the profits, or do nothing? 

At Stockopedia we're aware of the popularity of the 52-week high as a market timing indicator. In our experience, investors are often left wondering what to do when it happens when a 52-week high is hit. As a lot of our work is driven by insights from academic research, here’s a primer on what the academic research says in this area:


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 over time, momentum takes over and the price moves higher and higher.

A look at Allergy Therapeutics’s StockReport could offer more insight into what’s driving the momentum in its share price - and whether that might continue.

What does this mean though for current shareholders and those considering buying? The post-earnings announcement drift means that a share price is likely to continuing rising after a given share hits at 52-week high. Of course, you would want to look at other factors (such as whether a share has good fundamentals) before making a decision to buy or sell.

What does this mean for potential investors?

With Allergy Therapeutics trading close to a 52 week high, it’s possible that investors in the market are uncertain about where the price will move next. It's important to remember that momentum on its own is no guarantee of future returns.

To get a better idea about whether this trend will continue, it's worth doing some investigation yourself. Indeed, we've identified some areas of concern with Allergy Therapeutics that you can find out about here.

Alternatively, if you'd like to find more shares that are trading close to new highs, you can find them on this 52 Week Highs screen.

Share this article
As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.
Share Price
Change Today
Allergy Therapeutics ( )

Stockopedia is here to help individual investors beat the markets by being the very best in stock analysis, research & community. Take a 30 day free trial of our extensive multi-award winning service and find out why more than ten thousand global investors can't live without it.

© Stockopedia 2021, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.