Business
5 Stocks With Recent Price Strength Amid Extreme Volatility
5 Stocks With Recent Price Strength Amid Extreme Volatility
About this update from Drdgold Ltd.
U.S. stock markets have been enduring severe volatility over the past month. Wall Street’s recent turmoil is broad-based. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are in the negative territory year to date. The S&P 500 and the Nasdaq Composite are in fact, in a correction zone. Moreover, the mid-cap-centric S&P 400 is in the red and the small-cap benchmark Russell 2000 is in the bear territory, year to date.Market participants remained concerned about the Trump administration’s tariff and trade-related policies and their impact on U.S. economic growth, especially on the inflation rate. Recently released several key economic data have clearly shown that the U.S. economy is weakening. The resilient labor market has shown softness. The last released data for retail sales, industrial production, manufacturing PMI, housing sector data and consumer confidence and sentiment indexes came in well below expectations.Consequently, a handful of stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. Such stocks have a high chance of carrying the momentum forward.Five such stocks are — DRDGOLD Ltd. DRD, GeneDx Holdings Corp. WGS, EverQuote Inc. EVER, HCI Group Inc. HCI and Alibaba Group Holding Ltd. BABA.If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.Here’s how you should create the screen to shortlist the current as well as the potential winners.Screening Parameters:Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks. Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period. Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #...