The broader U.S. equity markets witnessed intense volatility over the past few days, as mixed signals emanated from the power corridors of Washington. While President Trump extended the deadline to initiate a deadly attack on Iran’s energy infrastructure to April 6, the Iranian government indicated that they had no intention of brokering any truce deal with the United States, even if its leaders are reportedly reviewing an American proposal to end the month-long war. Various media reports suggested that the Pentagon is also considering amplifying its military presence in the region to seek a resolution to this impasse.

The uncertainty has affected the global energy market, with crude oil prices remaining highly volatile. Although negotiations are continuing in the backdrop, an amicable solution appears to be very fragile. Amid the vagaries of the market, 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, like Micron Technology, Inc. (MU Quick QuoteMU - Free Report) , Credo Technology Group Holding Ltd (CRDO Quick QuoteCRDO - Free Report) and Vermilion Energy Inc. (VET Quick QuoteVET - Free Report) 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. 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.

Momentum strategies have been known to be alpha-generative over a long period and across market stages. Therefore, this strategy is quite tricky to implement, as detecting these trends is not easy. 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 long-term price momentum and a short-term pullback in price.

Screening Parameters for Momentum Anomaly Stocks

Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.

Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.

Zacks Rank #1: Stocks sporting a Zacks Rank #1 (Strong Buy) have a proven history of outperformance irrespective of the market conditions. You can see the complete list of today’s Zacks #1 Rank stocks here.

Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process, as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.

Current Price Greater Than $5: The stocks must all be trading at a minimum of $5.

Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price. 

Average 20-Day Volume Greater Than 100,000: A substantial trading volume ensures that these stocks are easily tradable.

Here are three of the eight stocks that made it through this screen:

Idaho-based Micron has established itself as one of the leading worldwide providers of semiconductor memory solutions. Micron manufactures and markets high-performance memory and storage technologies, including Dynamic Random Access Memory, NAND flash memory, NOR Flash, 3D XPoint memory and other technologies. Its solutions are used in leading-edge computing, consumer, networking and mobile products. 

The stock has jumped a whopping 289.9% in the past year but declined 20% in the past week. Micron has a Momentum Score of A.

Based in Grand Cayman, the Cayman Islands, Credo provides various high-speed connectivity solutions for optical and electrical Ethernet and PCIe applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. Its products enable faster, more reliable, more energy-efficient, and scalable solutions that support the ever-expanding demands of AI, cloud computing, and hyperscale networks. 

The stock has soared 127.3% in the past year but lost 9.9% in the past week. Credo has a Momentum Score of A. 

Headquartered in Calgary, Canada, Vermilion engages in the exploration and development of petroleum and natural gas and optimization of producing properties in North America, Europe, and Australia. Its diversified portfolio delivers free cash flow through direct exposure to global commodity prices and enhanced capital allocation optionality.

The stock has surged 61.1% in the past year but lost 7.8% in the past week. Vermilion has a Momentum Score of B.