December 26, 2024
Chicago, IL – December 26, 2024 – Stocks in this week’s article are Carvana Co. CVNA, Marvell Technology, Inc. MRVL and Coinbase Global, Inc. COIN.
The broader U.S. equity markets have witnessed significant volatility over the past few trading days as concerns regarding the Federal Reserve's interest rate cuts took center stage amid stubborn inflation. However, the November reading of the personal consumption expenditures price index, which increased 2.4% year over year, offered some solace as it was a tad less than broad-based expectations. This helped defuse some of the bearishness and helped stocks recover from a volatile past week that witnessed the longest losing streak since the 1970s.
Although investors await a "Santa Claus" rally to end the year on a high, the markets have begun the holiday week on a muted note. Amid the 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 Carvana Co. , Marvell Technology, Inc. and Coinbase Global, Inc. , 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.
Here are three stocks out of the nine that made it through this screen:
Headquartered in Phoenix, AZ, Carvana is a leading e-commerce platform for buying and selling used cars. Carvana's end-to-end online business model covers every aspect of used-car retailing — including sales, financing, logistics, inspection and repair centers, as well as software development — and has transformed traditional used-car sales in several ways. The stock has skyrocketed 306.6% in the past year but declined 13% in the past week. Carvana has a Momentum Score of A.
Wilmington, DE-based Marvell is a fabless designer, developer and marketer of analog, mixed-signal and digital signal-processing integrated circuits. The company operates in Bermuda, China, Germany, Japan, Korea, Taiwan, the United Kingdom and the United States. The stock has rallied 88.8% in the past year but declined 8.8% in the past week. Marvell has a Momentum Score of A.
Founded in 2012, Coinbase is an American publicly traded company that operates a cryptocurrency exchange platform. It is the largest cryptocurrency exchange in the United States in terms of trading volume. The stock has surged 52.8% in the past year but declined 15% in the past week. Coinbase 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2387562/3-momentum-anomaly-stocks-to-buy-amid-heightened-volatility
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.
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Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report
Carvana Co. (CVNA) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
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