Every week, the Momentum 40 list highlights 40 of the current market leaders – typically high-growth stocks with high relative strength and powerful technical setups. The Momentum 40 list is an excellent idea generation tool for long-term trend-followers, position traders, and short-term swing traders.
Some of the notable movers this year include VIAV +101% in 12 weeks, INTC +147% in 7 weeks, AEHR +118% in 4 weeks, AAOI +245% in 10 weeks, BE +190% in 17 weeks, MRVL +92% in 8 weeks, VRT +114% in 18 weeks, LWLG +127% in 4 weeks, and many others between 50% and 100%, a whole lot more with losses under 10%. MU was on the list for 189% in 26 weeks, then it was sold. It was bought back 3 weeks ago, and it is already up another 59%.
I’ve been posting the Momentum 40 list since 2010. Every Friday, I would send the changes an hour or so before the market closes – which stocks are leaving and which are joining. It’s basically a trend-following system that requires action once per week. The losers are cut as quickly as possible, and the winners stay as long as needed. It’s a system that works, and it has outperformed significantly over the years. Year-to-date, the list is up 63%, if we assume an equal-weighted allocation of 2.5% for each stock. The list had many other strong years of 30%+. It was up more than 80% in 2020, but I haven’t seen such a strong performance so early in the year. It is probably not sustainable. This post might end up being a contrarian indicator in the short-term. What’s more important is that the trend-following system Momentum 40 is robust, and it works. There’s always room for improvement. For example, if every loss is kept at 7% and there’s a simple market timing element like keeping a higher cash position when the indexes are under their 50 or 200-day moving average, the results can be even better.
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