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High Momentum ETFs & Stocks to Bet on

Sanghamitra Saha

After theS&P 500 saw its worst first quarter ever (down 20%), the index’s recovery momentum has picked up pretty well in the second quarter. The S&P 500 advanced about 19% in April. The month was all about coronavirus-led global lockdowns, massive Fed and government stimulus in the United States, unprecedented policy easing in various parts of the globe and the biggest OPEC+ output cut deal (read: Top ETF Stories of April Likely to Hit Headlines Again in May).

The winning momentum of Wall Street is being carried into May thanks to the reopening of the economies. Moreover, China – which enacted lockdown pretty earlier than the rest of world – reported a 3.5% year-over-year rise in exports in April, crushing analysts’ expectations of a decline in 15.7%. This led to optimism about the same level of global recovery in the coming days.

However, the key U.S. indexes have recorded some dips this month due to some earnings underperformance and oil price volatility. As a result, the S&P 500 has lost about 1% past week. But the overall market sentiment is upbeat, mainly helped by the technology and healthcare sectors. Reopening of economies have instigated hopes of the fast oil price recovery. In fact, the Nasdaq became positive for the year (read: 3 Sector ETFs Gaining Momentum in May).   

Momentum ETFs & Stocks

Momentum investing might be an intriguing idea for those seeking higher returns in a short spell. It looks to reflect profits from buying stocks that are sizzling on the market. Against the latest investing backdrop, investors may choose to bet on momentum ETFs and stocks. These ETFs and stocks beat the S&P 500 past week.

ETF Picks

Invesco DWA Technology Momentum ETF PTF — Up 8.1% Past Week

The Zacks Rank #2 (Buy) fund follows the DWA Technology Technical Leaders Index, which identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on U.S. exchanges (read: What's in Store for Work-From-Home ETF & Stock Earnings?).

Invesco DWA Healthcare Momentum ETF PTH — Up 5.9% Past Week

The Zacks Rank #3 (Hold) fund follows the DWA Healthcare Technical Leaders Index that identifies companies showing relative strength and composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on U.S. exchanges.

First Trust Dorsey Wright Momentum & Low Volatility ETF DVOL – Up 1.9% Past Week

The underlying Dorsey Wright Momentum Plus Low Volatility Index seeks to track the overall performance of 50 stocks within the NASDAQ US Large Mid Cap Index that exhibit the lowest levels of volatility while maintaining high levels of relative strength.

iShares Edge MSCI USA Momentum Factor ETF MTUM – Up 1.1% Past Week

The underlying MSCI USA Momentum Index measures the performance of U.S. large and mid-capitalization stocks exhibiting relatively higher momentum characteristics.

Stock Picks

These stocks are top-rated and have gained at least 5% past week. These stocks have a Momentum Score of A.

Wayfair Inc W — Up 39.2% Past Week

The Zacks Rank #1 (Strong Buy) company is one of the world's leading online sellers of home goods products, consisting of furniture and home decor.

Bandwidth Inc BAND — Up 30.3% Past Week

The Zacks Rank #1 company provides cloud-based communications platform for enterprises primarily in the United States.

Sprouts Farmers Market Inc SFM — Up 15.1% Past Week

The Zacks Rank #1 company operates in a highly fragmented grocery store industry.

Stamps.com Inc STMP — Up 13.8% Past Week

The Zacks Rank #2 company is a leading provider of Internet-based postage services.

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Invesco DWA Technology Momentum ETF (PTF): ETF Research Reports
 
Wayfair Inc (W) : Free Stock Analysis Report
 
Sprouts Farmers Market Inc (SFM) : Free Stock Analysis Report
 
Stampscom Inc (STMP) : Free Stock Analysis Report
 
Invesco DWA Healthcare Momentum ETF (PTH): ETF Research Reports
 
iShares Edge MSCI USA Momentum Factor ETF (MTUM): ETF Research Reports
 
Bandwidth Inc (BAND) : Free Stock Analysis Report
 
First Trust Dorsey Wright Momentum Low Volatility ETF (DVOL): ETF Research Reports
 
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