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5 Stocks With Recent Price Strength to Maximize Your Gains

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Nalak Das
·6 min read
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Wall Street defeated the coronavirus-led pandemic last year. The year was rather dramatic with the termination of the largest bull market in early March, formation of the shortest bear market and the confirmation of a new bull market. Stock markets have maintained their rally so far in January 2021 too and are likely to remain northbound in the long term.

The FDA authorized two COVID-19 vaccines in December 2020, which means that the economy should reopen and gradually operate at the pre-pandemic level. Since the lockdowns imposed in March, the U.S. economy is operating at a significant sub-optimal level.

On Jan 19, Dr. Rochelle Walensky, President Biden’s nominee to Head the Centers for Disease Control and Prevention, expressed her confidence that the country has enough COVID-19 vaccine doses to meet the Trump administration’s goal of immunizing 100 million people in 100 days despite a slower-than-expected rollout.

On Jan 14, Joe Biden had proposed a  new $1.9 trillion coronavirus-aid package called “American Rescue Plan.” The proposed plan will include increasing direct payments to $2,000 from the existing $600 and supplemental unemployment benefits to $400 per week through September.

Moreover, the Fed is pursuing a remarkable ultra-dovish monetary policy since March 2020. The benchmark interest rate had been reduced to 0-0.25% in March and is likely to stay there at least up to 2023.

At this stage, wouldn’t it be a safer strategy to look for stocks that are winners and have the potential to gain further?

Sounds Good? Here’s How to Execute It:

One should primarily target stocks that have freshly been on a bull run. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously witnessing an uptrend, there must be a solid reason or else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, you need to set other relevant parameters to create a successful investment strategy.

Here’s how you should create the screen to shortlist the current as well as the potential winners.

Screening Parameters:

Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.

Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.

Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.

Current Price greater than 5: The stocks must all be trading at a minimum of $5.

Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.

Just these few criteria have narrowed down the search from over 7,700 stocks to just 16.

Here we present five out of those 16 stocks:

Northern Technologies International Corp. NTIC is engaged in the development, construction, ownership, operation, maintenance, and management of solar power plants in India.

The stock price has soared 41.6% in the past four weeks. The company has an expected earnings growth rate of more than 100% for the current year (ending August 2021). The Zacks Consensus Estimate for the current year has improved 22.6% over the last 30 days.

eXp World Holdings Inc. EXPI provides cloud-based real estate brokerage services for residential homeowners and homebuyers in the United States, Canada, the United Kingdom and Australia.

The stock price has jumped 30.9% in the past four weeks. The company has an expected earnings growth rate of 56.7% for the current year. The Zacks Consensus Estimate for the current year has improved 37.3% over the last 60 days.

Matson Inc. MATX provides ocean transportation and logistics services. Its Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, as well as to other island economies in Micronesia.

The stock price has climbed 18% in the past four weeks. The company has an expected earnings growth rate of 5.5% for the current year. The Zacks Consensus Estimate for the current year has improved 21.4% over the last 30 days.

QAD Inc. QADA operates as a global provider of enterprise software applications, professional services and application support for manufacturing companies. The stock price has surged 10.7% in the past four weeks. The company has an expected earnings growth rate of 12.2% for next  year (ending January 2022). The Zacks Consensus Estimate for next year has improved 28.4% over the last 60 days.

Mueller Industries Inc. MLI manufactures and sells copper, brass, aluminum, and plastic products in the United States, the United Kingdom, Canada, South Korea, the Middle East, China, and Mexico.

The stock price has advanced 9.4% in the past four weeks. The company has expected earnings growth of 17% for the current year. The Zacks Consensus Estimate for the current year has improved  more than 100% over the last 60 days.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.


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Matson, Inc. (MATX) : Free Stock Analysis Report
 
Mueller Industries, Inc. (MLI) : Free Stock Analysis Report
 
Northern Technologies International Corporation (NTIC) : Free Stock Analysis Report
 
QAD Inc. (QADA) : Free Stock Analysis Report
 
Exp World Holdings, Inc. (EXPI) : Free Stock Analysis Report
 
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