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Shield Therapeutics share price hits a new 52 week high

2nd May '19 by Ben Hobson

Shares in Shield Therapeutics (LON:STX) are currently trading at a 52 week high, with the share price up by around 16.3% to 99p over the past week. On a one-month basis, the Shield Therapeutics price has risen by 47.1%

Shield is a commercial stage pharma company with a focus on iron deficiency treatments. Last month it said the Swiss Agency for Therapeutic Products had approved a major extension of its lead product, Feraccru to include treatment of all adults with iron deficiency with or without anaemia.

For investors holding the stock (or considering buying it), the question is:what now?

52 week highs are a popular market indicator. Yet 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’...


Making sense of 52 week highs

52 week highs are always good news. But you might be surprised to know that the prices of high performing shares can be slow to move when these companies publish positive earnings news.

Studies show it happens because investors are wary about bidding high performing shares any higher (even if they deserve it).

This unusual behaviour is down to what the psychologists Amos Tversky and Daniel Kahneman called anchoring-and-adjustment. We form beliefs by using reference points (like share prices). But as new information comes to light (like earnings reports) we're often slow to update our beliefs away from the original anchor point.

Evidence shows this tug-of-war usually ends with the ‘new high’ stock actually 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 Shield Therapeutics’s StockReport could offer more insight into what’s driving the momentum in its share price - and whether that might continue.

Next steps

With Shield Therapeutics 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.

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