The broader U.S. equity markets witnessed intense volatility over the past few trading days as President Trump’s tariff war took its toll. The off-again-on-again 20% blanket tariff threat against most imports to the country has sent the stocks on a roller-coaster ride. To add to the woes, the Institute for Supply Management’s manufacturing index declined 1.3 points in March to 49, implying a contraction in the U.S. factory activity as the drumbeat of higher tariffs reverberated through the economy.   

However, after witnessing one of the worst quarterly performances by leading benchmark indices since 2022, markets appeared to shake off some negativity to start the April quarter on a positive note. Amid the vagaries of the market and related uncertainty, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like GameStop Corp. GME, GeneDx Holdings Corp. WGS and AppLovin Corporation APP when value or growth investing fails to generate the desired profits. 

This approach primarily tends to follow the adage, “the trend is your friend.” At its core, momentum investing is “buying high and selling higher.” It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.

Momentum strategies have been known to be alpha-generative over a long period and across market stages. So, this strategy is quite tricky to implement, as detecting these trends is no child’s play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from both long-term price momentum and a short-term pullback in price.

Screening Parameters for Momentum Anomaly Stocks

Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.

Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.

Zacks Rank #1: Stocks sporting a Zacks Rank #1 (Strong Buy) have a proven history of outperformance irrespective of the market conditions. You can see the complete list of today’s Zacks #1 Rank stocks here.

Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.

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

Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price. 

Average 20-Day Volume greater than 100,000: A substantial trading volume ensures that these stocks are easily tradable.

Here are three stocks out of the seven that made it through this screen:

Headquartered in Grapevine, TX, GameStop is the world's largest video game retailer. The company offers the best selection of new and pre-owned video gaming consoles, accessories and video game titles in both physical and digital formats. GameStop also publishes Game Informer, the world’s largest print and digital video game publication, with reviews of new title releases, game tips and news regarding current developments in the video game industry. The stock has surged 100.4% in the past year but declined 11% in the past week. GameStop has a Momentum Score of A. 

Headquartered in Stamford, CT, GeneDx provides genetic testing services primarily for pediatric and rare disease diagnostics with a focus on whole exome and genome sequencing, as well as data and information services. GeneDx’s industry-leading exome and genome tests translate complex genomic data into clinical answers that unlock personalized health plans, accelerate drug discovery and improve health system efficiencies. The stock has rallied 806.7% in the past year but declined 15.9% in the past week. GeneDx has a Momentum Score of A.

Headquartered in Palo Alto, CA, AppLovin offers a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. AppLovin provides end-to-end software and AI solutions for businesses to reach and grow their global audience. The stock has surged 305.5% in the past year but declined 18.4% in the past week. AppLovin has a Momentum Score of B.

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 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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GameStop Corp. (GME) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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