A momentum stock is a stock that trades with massive volume and rapid price gains. Momentum stocks tend to return significant gains on the upside, but they are more vulnerable to big downside moves if the momentum turns downward.
2014 Recap: What Will Affect the Economy in 2015Looking back on 2014, despite the elimination of quantitative easing and the pending rise in interest rates by the Federal Reserve, it’s clear that the bulls controlled the stock market. In early December, things were looking rough. Stocks were threatening to move lower as the market focused on the economic stalling in China, Japan, and Europe, along with the political and economic turmoil in Russia that could kill the economic renewal in the eurozone and the global economy. However, a positive that sets up well for 2015 is the renewed positive bias that emerged and drove the DOW and S&P 500 to new record-highs. The blue chips were s ... Read More
It was just a few months ago that the technology sector stocks, specifically the momentum stocks, were getting bashed around and sold off by the stock market. Since then, the selling has subsided and we have seen a nice rebound in technology stocks to the point where the NASDAQ is the top gainer in the stock market with a 6.88% advance as of Monday. By contrast, blue chips are hurting, with the Dow Jones Industrial Average down 0.55%. What the stock market is suggesting to us is that the appetite for risk and higher-beta stocks continues to be prevalent as investors seek the po ... Read More
We all know how hot the social media space is with some sizzling returns shown by such stock market heavyweights as Facebook, Inc. (NASDAQ/FB), Twitter, Inc. (NYSE/TWTR), Yelp, Inc. (NYSE/YELP), and LinkedIn Corporation (NYSE/LNKD) to name a handful. The valuation of these momentum stocks is especially high, but as long as there are buyers, these stocks will continue to attract major market surges. Much of the easy money may be gone for now, but there are still some Internet stocks trading here that offer excellent potential for some staggering gains for aggressive traders. Yet the stocks I’m referring to are based out of Read More
There is a lot of money trading the stock market each day, and this is especially true with the momentum stocks that are making many traders rich. While anyone can trade momentum stocks, to make the real big money, you need to be trading big positions on these momentum stocks and be willing to assume the risk that the trade could go the other way. The key to trading momentum stocks is to make sure you are closely monitoring the price action and the volume on the bid side, especially. A major upward push in bids could foreshadow a pending upward move in the stock. The same can be said for risi ... Read More