We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks.com featured highlights Uber, NVIDIA and Carvana
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 23, 2023 – Stocks in this week’s article are Uber Technologies, Inc. (UBER - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Carvana Co. (CVNA - Free Report) .
3 Momentum Anomaly Picks as Treasury Yields Induce Volatility
The broader equity markets mostly trended down over the past few trading days, primarily triggered by the market uncertainty owing to the Federal Reserve’s stance to hold interest rates steady while keeping the door ajar for another hike before the end of the year. Moreover, indications of fewer cuts next year and ‘a higher-for-longer approach to interest rates’ shifted the fulcrum in favor of the less risky asset portfolio of bonds, with Treasury yields hitting their highest levels since 2007.
While the 10-year Treasury yield reached a tally of 4.996%, the highest in 16 years, the 30-year Treasury yield hit 5.12% – the highest since 2007. However, the stock market partially pared the loss with solid earnings performance from hitherto reported companies. The better-than-expected quarterly earnings reports paint a relatively stable picture of the overall economy, particularly consumer spending, thereby offering mixed signals to investors and inducing market volatility.
With looming 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 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. But before we delve deep into it, let us try to fathom why does the momentum strategy at all work?
There are several behavioral biases that most investors exhibit in their decision-making. And these emotional responses, or rather mistakes, make the momentum strategy work.
For example, some investors are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices. On the other hand, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid making such errors in judgment.
Furthermore, investors initially tend to underreact to news, events or data releases. However, once things become clear, they have a habit of going with the flow and overreacting, causing dramatic price reactions. These behavioral problems extend trends, thus opening up huge opportunities for momentum players.
To sum up, 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.
In this context, stocks like Uber Technologies, Inc., NVIDIA Corp. and Carvana Co. are worth betting on.
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 nine that made it through this screen:
Based in San Francisco, CA, Uber focuses on developing and supporting proprietary technology applications or platforms. These platforms enable independent providers of ridesharing services, Eats meal preparation and delivery services to transact with riders (for ridesharing services) and eaters (for meal preparation and delivery services). The stock has gained 52.5% in the past year but declined 7% in the past week. Uber has a Momentum Score of A.
Santa Clara, CA-based NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality (VR) platforms. NVIDIA’s GPU success can be attributed to its parallel processing capabilities backed by thousands of computing cores, which are necessary to run deep learning algorithms.
The company’s GPU platforms are playing a major role in developing multi-billion-dollar end markets like robotics and self-driving vehicles. The stock has appreciated a stellar 237.7% in the past year but lost 10.3% in the past week. NVIDIA has a Momentum Score of A.
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 that covers every aspect of used-car retailing — including sales, financing, logistics, inspection and repair centers, as well as software development — has transformed traditional used-car sales in several ways. The stock has rallied 121.7% in the past year but declined 6.7% in the past week. Carvana has a Momentum Score of A.
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.
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.
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks.com featured highlights Uber, NVIDIA and Carvana
For Immediate Release
Chicago, IL – October 23, 2023 – Stocks in this week’s article are Uber Technologies, Inc. (UBER - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Carvana Co. (CVNA - Free Report) .
3 Momentum Anomaly Picks as Treasury Yields Induce Volatility
The broader equity markets mostly trended down over the past few trading days, primarily triggered by the market uncertainty owing to the Federal Reserve’s stance to hold interest rates steady while keeping the door ajar for another hike before the end of the year. Moreover, indications of fewer cuts next year and ‘a higher-for-longer approach to interest rates’ shifted the fulcrum in favor of the less risky asset portfolio of bonds, with Treasury yields hitting their highest levels since 2007.
While the 10-year Treasury yield reached a tally of 4.996%, the highest in 16 years, the 30-year Treasury yield hit 5.12% – the highest since 2007. However, the stock market partially pared the loss with solid earnings performance from hitherto reported companies. The better-than-expected quarterly earnings reports paint a relatively stable picture of the overall economy, particularly consumer spending, thereby offering mixed signals to investors and inducing market volatility.
With looming 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 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. But before we delve deep into it, let us try to fathom why does the momentum strategy at all work?
There are several behavioral biases that most investors exhibit in their decision-making. And these emotional responses, or rather mistakes, make the momentum strategy work.
For example, some investors are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices. On the other hand, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid making such errors in judgment.
Furthermore, investors initially tend to underreact to news, events or data releases. However, once things become clear, they have a habit of going with the flow and overreacting, causing dramatic price reactions. These behavioral problems extend trends, thus opening up huge opportunities for momentum players.
To sum up, 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.
In this context, stocks like Uber Technologies, Inc., NVIDIA Corp. and Carvana Co. are worth betting on.
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 nine that made it through this screen:
Based in San Francisco, CA, Uber focuses on developing and supporting proprietary technology applications or platforms. These platforms enable independent providers of ridesharing services, Eats meal preparation and delivery services to transact with riders (for ridesharing services) and eaters (for meal preparation and delivery services). The stock has gained 52.5% in the past year but declined 7% in the past week. Uber has a Momentum Score of A.
Santa Clara, CA-based NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality (VR) platforms. NVIDIA’s GPU success can be attributed to its parallel processing capabilities backed by thousands of computing cores, which are necessary to run deep learning algorithms.
The company’s GPU platforms are playing a major role in developing multi-billion-dollar end markets like robotics and self-driving vehicles. The stock has appreciated a stellar 237.7% in the past year but lost 10.3% in the past week. NVIDIA has a Momentum Score of A.
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 that covers every aspect of used-car retailing — including sales, financing, logistics, inspection and repair centers, as well as software development — has transformed traditional used-car sales in several ways. The stock has rallied 121.7% in the past year but declined 6.7% in the past week. Carvana has a Momentum Score of A.
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.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2169440/3-momentum-anomaly-picks-as-treasury-yields-induce-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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.