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How to Buy Momentum, Trade Options and Short Stocks

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Over the years, maybe you've bought some individual stocks and some ETFs. You may own some mutual funds in a retirement account.

But now, you want to get out of your comfort zone and take your investing to the next level.

But how?

I've recently explored 3 popular trading strategies on the Market Edge Podcast with Zacks stock strategists who use these strategies every day.

How to Buy Momentum Stocks

Perhaps momentum stocks interest you. You like buying stocks that have upward velocity and enjoy the adrenalin rush of getting in when everyone else is getting in too.

But you're unsure of how to pick momentum stocks.

Zacks Stock Strategist David Bartosiak, who also manages the Momentum Trader portfolio, shares his tips in this podcast for finding the best momentum stocks including:

1. Buying when there is relative strength versus the market
2. Using the chart to find resistance, 52-week highs and trend lines
3. How to use the Zacks Rank to increase your odds of finding the best momentum stocks

He talks about the momentum in Boston Scientific (BSX - Free Report) and how some regional banks are also popping up on his momentum screen.

How to Trade Options

What about trading options?

If you've been on Stocktwits enough times, you'll come across a lot of people talking about options and "calls" and "puts" and being "in the money."

Ever wonder what it all means?

Zacks Kevin Matras, who manages the Options Trader portfolio, breaks it all down for beginners in this podcast.

He sets up the options trade on Johnson & Johnson (JNJ - Free Report) and Facebook (FB - Free Report) among a few others.

How to Short a Stock

Maybe you don't want to be a long-only trader anymore. You have some ideas on shorting some stocks.

But how do you get started?

Jeremy Mullin, the manager of Zacks Counterstrike portfolio, which is both long and short on individual stocks, describes two main scenarios that traders should watch for when deciding to short a stock.

1. When an "event" of some kind happens. Recent examples of this were with Lumber Liquidators (LL - Free Report) when it was the focus of a 60 Minutes segment about its Chinese laminate flooring and Chipotle (CMG - Free Report) which had to shut restaurants after a health scare.

2. When there are disappointing fundamentals. This usually happens when a company reports earnings or pre-announces disappointing sales or guidance. Recent examples of this scenario were with LinkedIn and Michael Kors. Both stocks plunged on earnings fears, and rebounded.

Be sure to check out these three strategies and the Market Edge Podcast every week for even more trading ideas..

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.

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