When a stock that has risen in the past continues to rise, we call it momentum. Momentum is a bit of a problem for the Efficient Market Hypothesis because it implies a profitable trading rule - "buy recent winners".
Recent academic studies have found support for momentum effects even after controlling for risk, data mining biases and trading costs. The Economist has a really nice article on the current state of what we know about momentum. Well worth a read.
A Finance Professor's blog. I am a Professor of Finance in the Poole College of Management at NC State University. My website: https://sites.google.com/ncsu.edu/warr Opinions are my own.
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