Asos (LON:ASC) cover image
258 Reads (2 mins read)

Shares in Asos bounce back from market chaos

16th Sep by Ben Hobson

After the turbulence that ripped through the stock market in March, shares in Asos (LON:ASC) have gone on to outperform.

In terms of relative price strength, the price is up by 55.5% against the market over the past three months. The shares are currently trading at 4974p.

That performance comes after a tumultuous spell for the UK equities. Markets collapsed in March on concerns about the unfolding coronavirus crisis. And while index prices have trended higher in recent weeks, there are still grave concerns about the near-term outlook for corporate earnings. 

The upside for Asos is that investor optimism is translating into positive price momentum, which is regarded as a leading predictor of future performance...

GET MORE DATA-DRIVEN INSIGHTS INTO LON:ASC »

Trading the trend

Research by some of the investment industry's most respected strategists shows that relative strength can be one of the most consistently useful pointers to growth.

Price momentum is heavily influenced by psychology, with investors under-reacting and subsequently over-reacting to company news, driving prices higher over time.

The catch is that investor sentiment is prone to wild swings, which makes momentum risky when used on its own. Combining it with other factors, like attractive valuation, high quality and low volatility, can help reduce that risk.

Overall, the upward trend in the share price of Asos over the past three months is a promising sign. But while the stock has been outperforming recently, relying on momentum in volatile markets can be hazardous.

What does this mean for potential investors?

Shares in Asos have outperformed the market over the past three months - but 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 Asos that you can find out about here.

Alternatively, if you'd like to find more shares with strong price momentum, you can find them on this Outperforming the Market 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
4665p
Change Today
-0.17%
Asos ( )

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 2020, 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.