Most of us have heard the adage “trend is your friend”. And this is the undeniable key to success when it comes to short-term investing or trading. However, it is not easy to ensure the sustainability of a trend and profit from it.
Usually, the direction of a stock’s price action quickly reverses after taking a position, causing investors to lose short-term capital. As such, it’s possible to continue the momentum in the stock – solid fundamentals, positive earnings forecast revisions, etc. like – it’s important to make sure there are enough factors.
Our “Last Price Strength” screen, built on a unique short-term trading strategy, can be very useful in this regard. This predefined screen makes it really easy to shortlist stocks that have enough fundamental strength to sustain recent uptrends. Also, the screen only crosses stocks that are trading at the top of the 52-week high-low range, which is usually a bullish indicator.
WANdisco PLC (WANSF – Free Report) is one of the few suitable candidates to screen. Here are the main reasons why it is a profitable bet for “trend” traders.
A solid price increase over a 12-week period reflects investors’ willingness to pay more for a stock’s potential rise. WANSF is a pretty good fit in this regard, with a 51.4% gain over the period.
However, it is not enough to look at the roughly three-month price change as it does not reflect any trend reversal that might occur in a shorter time frame. It is important for a potential winner to maintain the price trend. The 31.8% price increase in the last four weeks keeps the trend still in place for this company’s stock.
Also, WANSF is currently trading at 90.4% of its 52-week High-Low Range, hinting that it may be on the verge of a breakout.
Looking at fundamentals, the stock currently carries a Zacks Rank #2 (Buy), which means it’s in the top 20% of the more than 4,000 stocks we’ve ranked based on earnings estimates revisions and EPS surprises. Factors affecting the short-term price movements of a stock.
Using four factors related to earnings estimates to classify stocks into five groups, from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), the Zacks Rank stock rating system has impressive externally audited trails. Record with Zacks Rank #1 stocks, which have averaged 25% annual returns since 1988. The full list of today’s Zacks Rank #1 (Strong Buy) stocks is here >>>>
Another factor that confirms the core strength of the company is the #1 Average Broker Recommendation (Strong Buy). This shows that the brokerage community is quite optimistic about the stock’s short-term price performance.
Therefore, the price trend in WANSF may not reverse anytime soon.
In addition to WANSF, there are a few more stocks currently passing through our “Final Price Strength” screen. You might consider investing in them and start looking for the latest stocks that fit these criteria.
This isn’t the only screen that can help you find your next winning stock pick. Depending on your personal trading style, you can choose from over 45 strategically created Zacks Premium Screens to beat the market.
But remember 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 the Zacks Research Wizard. The program comes loaded with some of our most successful stocktaking strategies, as well as allowing you to backtest the effectiveness of your strategy.
Click here to sign up for a free trial of the Research Wizard today.