What’s a Momentum Stock and How to Find Them

Traders like momentum stocks.

But what exactly do we mean by “momentum” stocks?

You’ve likely heard the scientific definition of momentum, which has to do with high velocity objects (like a moving truck on a downhill slope) picking up more speed as they go, making it harder for them to stop. Just as a heavy truck is harder to stop going down a hill than is a small car, stocks that are already rising over a period of time can be “harder to fall” than stocks that are not already rising.

While long-term oriented investors prefer value and to “buy the dip”, short-term oriented traders often prefer momentum stocks that are showing great uptrend strength.

What is a Momentum Stock?

By momentum stocks, we are referring to those stocks (and ETFs) that have shown major price appreciation in recent weeks (or months) and that are still currently rising while locked in major uptrends.

Below is an example of a momentum stock, the Amplify Junior Silver Miners ETF (SILJ).

Momentum Stock Example (SILJ)

The theory behind momentum trading (and investing) is that rising stocks tend to keep rising, just like our heavy truck rolling downhill gains more speed as it travels.

How to Find Momentum Stocks

It’s simple to determine whether a stock is showing momentum. Simply look at its chart on any charting platform (like our own Profit Trakker, Yahoo Finance or TradingView), and you will be able to visually determine if it has been rising over recent weeks or months. Is the price higher today than it was last month? Was last month’s price higher than the previous month? And so on.

But what if a trader doesn’t want to pour over dozens or hundreds of charts just to pick out a few momentum stocks? While finding the momentum stocks is helpful to the trader, who has that kind of time?

Therefore, one of our most popular daily stock lists is our “Momentum Stock Leaders.” We have a system in place that scans the markets for momentum stocks and ETFs, and we provide a handy, daily updated list of these momentum stocks for our members.

Here’s a sample of the Momentum Stock Leaders list.

View Momentum Leaders Stock List

How to Use Our Momentum Stock Leaders List

There are usually dozens of stocks and ETFs on this list, and we update it every day so that members get the latest data for their trading and investing research.

In this simple video presentation, I spent some time sharing how our members have been successfully using this unique Momentum-focused stock list.

Specifically, I laid out several short-term trading strategies that traders of all types can use to profit from this list.

I shared several strategies for swing traders, day traders, and even scalpers.

So too, many of our members report successfully using this list by combining it with our sector rankings research.

Each week, they will check our Swing trend sector rankings here (which we update every weekend) and then focus their short-term trading on stocks/ETFs in the leading sectors from our Momentum Leaders list here.

For example, let’s say the top-ranked sector right now is the Technology sector. Swing traders can sort our Momentum Stock Leaders list by Sector and filter down to only the Technology stocks. Once you’ve narrowed your list down, you can then focus on just a handful of momentum stocks for further trading consideration. With nearly 6,000 available stocks in the United States alone, many aspiring traders know that half the battle is narrowing down your list of stocks to trade!

Smart traders know the way to win in the markets is to stay on the right side of the trend.

And traders especially like stocks that are not only in confirmed uptrends but that are also moving on strong momentum.

If you are new to us here at Follow the Money, try combining our two powerful member services: Sector Rankings and Momentum Stock Leaders.

If you are an experienced trader in search of new short-term trading ideas, you can find many great potential trading setups this way!