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Highflying ETFs & Stocks for a Momentum Play

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The spectacular run in the Wall Street is showing no signs of slowing down with the bull market now drawing close to nine years. Strong corporate earnings as well as the biggest tax overhaul in decades have been driving the latest rally. Notably, the new tax structure will save billions in the corporate world, boosting earnings and reflation trade. It would further spark a wave of share buybacks, dividend hikes and mergers & acquisitions.

The Q4 earnings season is off to a strong start, with earnings of 133 S&P 500 companies that have reported results, up 12.3% from the same period last year on 8.8% higher revenues, with 81.2% beating EPS estimates and 78.9% beating revenue estimates. Overall, total earnings and revenues are projected to grow 11.6% and 5.9%, respectively (read: 4 ETFs Set to Surge in Q4 Earnings).

Solid global growth, jump in oil prices, and a weak dollar are adding to the strength. The rally defied the ills of both economics and politics like global trade fears, political instability in Washington and geopolitical tensions.

Given the bullish trend, momentum investing would be a winning strategy for those seeking higher returns in a short spell. This is because the strategy looks to fetch profits from buying hot stocks that have shown an uptrend over the past few weeks or months.

As such, we have presented few ETFs and stocks that hit new highs in the latest trading session. The trend is likely to continue as long as the market remains on an upward trajectory.

iShares Edge MSCI USA Momentum Factor ETF MTUM

This fund provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum Index. It holds 124 stocks and charges 15 bps in fees per year. The product is a popular choice with AUM of $7.1 billion and average daily volume of 473,000 shares. It has gained 10.1% so far this year.

PowerShares DWA Momentum Portfolio PDP

This fund tracks the Dorsey Wright Technical Leaders Index, which measures the performance of companies that demonstrate powerful relative strength characteristics. Holding 100 securities in its basket, it has AUM of $1.6 billion and trades in average daily volume of 81,000 shares. PDP charges 63 bps in annual fees and is up 7.9% so far this year (read: Amazing ETF Strategies for Skyrocketing Markets).

PowerShares S&P 500 Momentum Portfolio SPMO

This product tracks the S&P 500 Momentum Index, which measures the performance of stocks in the S&P 500 index that have a high "momentum score.” It holds 100 securities in its basket and charges 13 bps in fees per year. The fund has been overlooked by investors as depicted by its AUM of $14.8 million and a paltry average daily volume of 6,000 shares. It is up 8.9% so far this year.

Acushnet Holdings Corp. GOLF

This Massachusetts-based company designs, develops, manufactures and distributes golf products worldwide. It has seen positive earnings estimate revision of three cents for this year over the past seven days, with an expected earnings growth of 10.51%. The stock has a Zacks Rank #1 (Strong Buy) and Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Travelers Companies, Inc. (TRV - Free Report)

This New York-based company provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United States and internationally. It has seen solid earnings estimate revision of 15 cents for this year over the past seven days, with expected earnings growth of 45.05%. The stock has a Zacks Rank #2 and Momentum Score of A.

Seagate Technology plc STX

This Ireland-based company designs, produces, and distributes electronic data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It saw impressive earnings estimate revision of a couple of cents over the past seven days for the fiscal year (ending June 2018) with an expected earnings growth of 10.19%. The stock has a Zacks Rank #2 and Momentum Score of A (read: Unbelievable ETFs & Stocks On Sale).

Raytheon Company RTN

This Massachusetts-based company develops technologically integrated products, services, and solutions worldwide. It saw solid earnings estimate revision of 33 cents for this year over the past seven days, with an expected earnings growth of 18.50%. The stock has a Zacks Rank #1 and Momentum Score of A.

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