Which behavioral finance concept suggests that price trends observed over the last 6 to 12 months will likely continue?

The concept that price trends observed over the last 6 to 12 months will likely continue is known as momentum persistence. Momentum in finance refers to the tendency of an asset's price to continue moving in the same direction once a trend has been established. This behavioral finance phenomenon is often attributed to factors such as investor sentiment, trend-following strategies, and the reaction of traders to past performance.

In practice, momentum persistence can lead to continuous price movements, where assets that have performed well in the past continue to do so in the near future, while assets that have underperformed tend to lag. This tendency can create opportunities for traders and investors who can identify and capitalize on recent trends.

Understanding momentum persistence is crucial for technical analysts and traders, as it underpins many strategies that seek to exploit the continuation of price trends. Recognizing this pattern can aid in making informed decisions based on market behavior and historical price dynamics.