On any given day in financial markets, some shares will have significant moves relative to their underlying indices. These can take place because of news, such as results or trading statements, or due to takeover attempts or reports in newspapers.
Significant moves in a share price can result from such news and, as with any financial instrument, these moves can be higher or lower. It is up to every trader to decide whether they think a move will continue in succeeding sessions or will reverse direction. Basic support and resistance levels can be helpful here, by identifying areas where price movements have run out of momentum, and may provide entry points. A small position in a moving stock can be added to if the trade proves successful, removing the need to go ‘all out’ on a single trade.
IG’s watchlist of trending shares provides a useful starting point for those clients looking to place new day trades but don’t have time to do extensive and continuous research. It is updated by traders before the market opens and then throughout the day, to reflect breaking news and current key players, and is a useful way of keeping on top of developments in equity markets.
The names that appear on this list on a daily basis can be monitored closely to identify whether a move is continuing or has begun to reverse. The longer a move in one direction continues, the stronger the trend.