What is persistence, really? You’re out in the woods hiking; you run out of water and get lost. And yet, you persist. It means you keep going.
Price persistence is when the price of a security keeps going in whatever direction it’s currently going. A stock with a strong upward trend shows price persistence, as well as a stock with a strong downward trend. Where there’s price persistence, there’s general market agreement, i.e. yep, this security is worth more (or yep, this security is worth less).
High volatility, with the price of a security going up and down with no strong up or down trend, shows a lack of price persistence. It shows wishy-washiness. Investors talking price persistence shop are thinking about the security’s momentum (how fast is the price rising?) and its relative strength (how is the price compared to the market overall?).
Price persistence is considered useful by some, and...not-so-much by others. Some believe price persistence on a strong upward trend proves the stock is worthy and valuable. Others believe price persistence doesn’t mean that necessarily; it could mean that the stock is overvalued and overbought—overhyped.
Related or Semi-related Video
Finance: What is Volatility?77 Views
In finance allah shmoop what is volatility beta this thing
that's the symbol for volatility on the street we mean
the wall one not the mean one and it is
so commonly used that the in crowd members just say
beta when they're referring to volatility unless they're from tennessee
in which case they say you ve all y'all all
right so here's a siri's of stock prices stamped each
day that has lo ve all or low beta and
here's a siri's that has high beta dead man's pulse
versus rocky mountains Well what makes a stock volatile uncertainty
Think about it this way If everyone knew for sure
what a given stocks earnings would be for the next
ten years quarter by quarter and they also knew what
the overall markets average earnings would be in a few
other things like revenue growth and world conditions and we're
going to be war inflation there wouldn't be a lot
of guesswork The quote right unquote price today would be
thirty two dollars eighty three cents and the quote right
unquote rate of compounding would be eight percent in the
stock would slowly go up but this rate but in
non disney land riel life well nobody really knows much
of anything So stockcharts look like this and nerve endings
of wall street traders look like this Neither of them 00:01:19.771 --> [endTime] looked much like this chart So that's all you
