5 Stocks With Recent Price Strength Despite Market Turmoil

After witnessing an astonishing rally for more than five months in a row, Wall Street suffered a major blow on Sep 3. Markets rebounded on Sep 9, after facing a terrible pull down in the last three trading days. These were the worst-performing days in a row since April. However, all the three major stock indexes — the Dow, the S&P 500, and the Nasdaq Composite — plunged again on Sep 10 after a choppy trading session.

This clearly shows that volatility has set in Wall Street at least for the short-term. Historically, September is known as the worst-performing month in Wall Street. Investors started panicking that the coronavirus-defying rally would terminate this month.

The volatility may persist for a few more days as a section of economists and financial experts have already warned that larger corrections are in the offing. However, a closer look at the past five days' trading pattern clearly reveals that it was profit booking and not any major economic, financial, or political factor that led to the meltdown.

The technology sector pulled down the overall market after being the predominant driver of the impressive showing over the last five months. It was technology that had helped Wall Street in exiting a coronavirus-induced short bear market and form a new bull market. However, in the due course of the market's V-shaped recovery from its recent trough on Mar 23, technology stocks got overvalued.

At this stage, wouldn’t it be a safer strategy to look for stocks that are winners and have the potential to gain further?

Sounds Good? Here’s How to Execute It:

One should primarily target stocks that have freshly been on a bull run. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously witnessing an uptrend, there must be a solid reason or else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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