In this article we explain how you can conveniently screen for momentum stocks with Ziggma’s free stock screener and get great results within a matter of seconds.
Momentum investing is one of the most frequently used investment strategies. For good reason. When the good times last for a while, it can pay off very handsomely. Pick some good growth stocks that the market likes and let the winners run…to a certain point of course. Be sure to carefully watch valuation levels because as the air gets thinner (read: valuations become rich), the risk of a major reversal increases exponentially.
Momentum investing with a long-term time horizon.
Unless you fall into a meme stock trap, momentum stocks generally go up for good reason. The underlying business is doing well and benefits from attractive growth prospects. So, many momentum stocks will turn out to be on a long-term upwards trajectory, making them a great opportunity set for long-term investors as well.
How investors define momentum varies considerably. Much depends on your time horizon. As far as we are concerned, as long-term investors we look at three criteria:
The stock is within 5% from its 52w high.
The underlying business exhibits strong growth dynamics, current and for the next couple of years.
Growth is on sound (Read: profitable) footing.
Finding stocks close to their 52w highs.
Ziggma’s free stock screener lets you find stocks that are within 5% of their 52w highs within seconds. Simply select “52w High (%)” in the dropdown menu labelled ESG/Technical and move the dot on the sliding scale to 5%. As of the time of this writing 460 stocks in the Russell 3000 were within 5% of their 52w highs.
Screening for growth stocks.
As mid- to long-term investors we include underlying business growth in our definition of momentum. Screening for long-term and forward-looking revenue and earnings growth will take you a long way. In this search, 26 stocks meet the following growth criteria in addition to proximity to the 52w high:
There are examples abound of growth at any cost. Young companies often generate huge growth rates thanks to enormous marketing spend, but ultimately lose bundles of money. Unless you are comfortable with this approach for a specific company that you know well, you want to make sure that a business’ growth is on solid footing. The Ziggma free stock screener makes this easy for you. Simply select key profitability KPIs in the Profitability menu. In the screen require our stocks to generate a net margin of at least 10% and an average return on equity greater than 15%. Seven stocks meet these criteria.
How to capture all relevant KPIs and save time.
A Ziggma Premium subscription ($7.49/month on annual plan and $9.90 on monthly plan) gives you the opportunity to take stock screening to the next level. Along with many other features, it gives you full access to use Ziggma’s proprietary Ziggma Stock Scores in the stock screener. This has two major benefits for you:
The Ziggma Stock Scores capture literally all relevant financial metrics. Our proprietary algorithm scores stocks against their peers on 35 different key performance indicators over a multi-year period. Chances are you cannot screen more comprehensively.
Get access to stock sub-scores to screen according to your investment approach. If you are a growth investor, then the growth sub-score is what you will want to use. Value investors will want to screen for stocks with Valuation sub-score greater than 90, for example.
Narrowing down our screener results to stocks with a Ziggma Stock Score of 90 or higher leaves us with shortlist of three high potential stocks and businesses.
If you are on the Ziggma Premium Plan, you can now save this screen configuration to check back some other time and find out whether any new stocks fit these search criteria.
Our mission: Streamline your stock research experience.
Our objective for Ziggma’s stock research proposition is straightforward. We want to provide individual investors with best-in-class data and a streamlined stock research experience. To this end, we believe Ziggma offers you the best stock screener for speed and user experience on the market – no matter whether you are on the free plan or the Premium plan.
To measure price momentum, we use the 12-1 month return, which is a stock's return in the past 12 months, excluding the most recent month. The most recent month is excluded because short-term momentum often tends to reverse, so excluding it provides a better momentum signal.
Momentum is measured by continually taking price differences for a fixed time period. To create a 10 day period momentum line you would subtract the closing price from 10 days ago from the last closing price. This result is then plotted around a zero line.
Some of the main tools to measure momentum are the moving average convergence divergence (MACD), stochastic oscillator, price rate of change (ROC), and the relative strength index (RSI).
Some of the best free screeners on the web include those offered by Yahoo!Finance, StockFetcher, ChartMill, Zacks, Stock Rover, and Finviz. They all offer users a series of basic and advanced screeners. Many stock screeners offer both basic and advanced, or free and premium, services.
The RSI is one of the most widely used momentum indicators. It shows the momentum of an asset's price and can be used to identify potentially overbought or oversold situations.
MACD is a trend-following indicator and is frequently regarded as the best momentum indicator. It shows how the price of a financial product relates to two moving averages. Indicating momentum, MACD alternates between moving averages.
Successful momentum trading involves identifying strong price momentum, selecting appropriate technical indicators for market analysis, such as the RSI and MACD, and setting trade parameters including strategic entry and exit points, stop losses, and position sizes relative to a trader's risk tolerance.
Investors can calculate momentum by measuring price differences over a specific time period. For example, a 10-day momentum indicator is calculated by subtracting the closing price of 10 days ago from the current closing price. The indicator then plots this value as a line on the stock chart.
As per Momentum Trading, you should enter a stock when its price has just started moving up and exit as soon as it starts declining. The idea behind this strategy is that the costs of stores often don't reflect their actual value for an extended period, and they tend to move in one direction for long periods.
The payments for order flow used by brokerages to make money from commission-free trades may result in lower quality order execution, leading to slightly higher buy prices and marginally lower sell prices.
You'll quickly identify which stocks to buy, which to sell and target today's hottest industries. Gain full access to our powerful tools and resources locked behind Zacks Premium for 30 days absolutely free. Subscription: $249/year.
Google Finance doesn't have a stock screener built into its platform. However, you can use the search function to find specific stocks or market information, or you can use other websites or tools that offer stock screening capabilities. Some popular stock screening tools include: Finviz.
The Yahoo Finance app has a simple-to-use design, so you can easily track your stocks, commodities, bonds, and currencies. You can create and track the performance of your personal portfolio and sync multiple portfolios across all your devices.
So, the choice between Ticker Tape Review and Screener Review depends on your preferences and needs. If you are looking for a comprehensive investment analysis tool with in-depth research, educational resources, and a wide range of features, Ticker Tape Review may be the better option for you.
Hobby: LARPing, Kitesurfing, Sewing, Digital arts, Sand art, Gardening, Dance
Introduction: My name is Amb. Frankie Simonis, I am a hilarious, enchanting, energetic, cooperative, innocent, cute, joyous person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
