OAlthough “the trend is your friend” when it comes to short-term investing or trading, the timing of trend entries is a key determinant of success. And increase the odds of success by making sure a trend’s sustainability isn’t easy.
Often, the direction of a stock’s price movement reverses quickly after entering a position, causing investors to suffer a short-term capital loss. It is therefore important to ensure that there are enough factors – such as strong fundamentals, positive revisions to earnings estimates, etc. – which could maintain the momentum of the title.
Investors looking to profit from stocks that are currently moving may find our “Recent Price Strength” screen very useful. This preset screen is handy for spotting stocks that are on an uptrend supported by the strength of their fundamentals and for trading at the upper end of their 52-week high-low range, which is usually an uptrend indicator.
There are several stocks that have crossed the screen and Commercial Bank of the Bay (BCML) is one of them. Here are the main reasons why this stock is a solid choice for “trend” investing.
A solid price increase over a 12-week period reflects investors’ continued willingness to pay more for a stock’s potential upside. BCML is quite well suited in this regard, gaining 8.2% over this period.
However, just looking at price action for about three months is not enough, as it does not reflect any trend reversals that may have occurred in a shorter time frame. It is important for a potential winner to maintain the price trend. A price increase of 9.1% over the past four weeks ensures that the trend is still in place for this company’s stock.
Additionally, BCML is currently trading at 92.5% of its 52-week high-low range, hinting that it may be on the verge of a breakout.
In terms of fundamentals, the stock currently carries a Zacks Rank #2 (Buy), meaning it’s in the top 20% of over 4,000 stocks we rank based on revision trends. earnings estimates and EPS surprises – the key factors that affect a stock’s short-term price movements.
The Zacks Rank stock rating system, which uses four factors tied to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive track record. externally audited record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor that confirms the fundamental strength of the company is its average broker recommendation of #1 (Strong Buy). This indicates that the trading community is very optimistic about the short-term price performance of the stock.
So, the price trend in BCML might not reverse any time soon.
In addition to BCML, there are several other stocks that are currently passing through our “Recent Price Strength” screen. You can consider investing there and start looking for the newest stocks that meet these criteria.
It’s not the only screen that could help you find your next winning stock pick. Depending on your personal investing style, you can choose from over 45 Zacks Premium Screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock picking strategy is to ensure that it has produced profitable results in the past. You can easily do this with the help of Zacks search assistant. As well as allowing you to test the effectiveness of your strategy, the program comes with some of our most successful stock picking strategies.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.