Price Persistence

DEFINITION of 'Price Persistence'

The tendency of a security's cost to continue moving in its present direction. A stock that has been in a strong upward or downward trend for weeks will display a high degree of price persistence. Conversely, a stock that has been trading in a choppy manner for an extended period of time will display a low degree of price persistence.

BREAKING DOWN 'Price Persistence'

Opinion is divided on the investment merits of stocks displaying a high degree of price persistence. Technical analysts who believe that the "trend is your friend" may consider a stock in a strong upward trend as a good investment candidate based on the view that the stock's move higher will continue. Others may consider such a stock as overbought, and therefore a sell candidate or one to which fresh capital should not be committed.