When it comes to short-term investing and trading, “trends are your friend,” but timing your entry into a trend is a key determinant of success. And making sure a trend doesn’t easily sustain increases your odds of success.
In many cases, after investing in a stock, the price movement quickly reverses, causing investors to suffer short-term capital losses. That’s why it’s important to make sure there are enough factors to sustain the stock’s momentum, including healthy fundamentals and positive earnings estimate revisions.
The “Recent Price Strength” screen, created based on your own short-term trading strategy, can be very helpful in this regard. This predefined screen makes it very easy to shortlist stocks with enough fundamental strength to sustain the recent uptrend. The screen also only passes through stocks that are trading at the top of their 52-week high-low range, which is usually a bullish indicator.
There are some stocks that passed the screen, DXP Enterprise (DXPE – Free Report) is one of them. Here are the main reasons why this stock is a solid choice for “trend” investing.
The robust share price growth over 12 weeks reflects investors’ continued willingness to pay premium for the stock’s upside potential, and DXPE has been a great fit in this regard, rising 47.1% over the period.
However, looking at price changes over approximately three months is not enough, as it does not reflect trend reversals that may have occurred over a shorter period of time. Maintaining the price trend is important for potential winners. His 1% price increase over the past four weeks shows that the industrial products supplier’s inventory trend is still continuing.
Additionally, DXPE is currently trading at 81.5% of its 52-week high-low range, suggesting it is on the brink of a breakout.
Looking at the fundamentals, this stock currently has a Zacks Rank #2 (Buy). This means it’s in the top 20% of more than 4,000 stocks ranked based on trends in earnings estimate revisions and surprise EPS. Factors that influence short-term price fluctuations of stocks.
The Zacks Rank stock rating system uses four factors related to earnings expectations to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell). Masu. This system has an excellent track record with external audits. Zacks #1 Rank stocks have generated an average annual return of +25% since 1988. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>>>
Another factor supporting the company’s fundamental strength is its #1 average broker recommendation (Strong Buy). This shows that the securities industry is highly optimistic about the stock’s short-term performance.
Therefore, the DXPE price trend may not reverse anytime soon.
In addition to DXPE, there are several other stocks currently passing through the “Recent Price Strength” screen. You may want to consider investing in these stocks and start looking for the latest stocks that meet these criteria.
This isn’t the only screen that will help you find your next winning stock. Based on your personal investment style, choose from over 45 Zacks premium screens strategically created to help you beat the market.
Keep in mind, though, that the key to a successful stock-picking strategy is one that has consistently delivered profitable results in the past. The Zacks Research Wizard makes this easy. The program incorporates some of the most successful stock-picking strategies, in addition to allowing you to back-test the effectiveness of the strategies.
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