A high momentum stock is a security that exhibits strong upward price movement and is expected to continue this trend in the near future.
These stocks are characterized by:
Price Movement
These stocks show significant price appreciation over a short timeframe:
Consistent upward trajectory in recent time periods
Rapid gains within a short tenure
Tendency to continue their price trend
Volatility
High momentum stocks often display increased volatility:
Larger-than-average price swings
Multiple small ups and downs within the overall trend
Provides opportunities for short-term profits
However, some traders prefer momentum stocks with lower volatility.
Trading Volume
High momentum stocks typically have above-average trading volume. This increased volume reflects:
Unusually high investor interest
Increased liquidity, making them attractive for short-term traders
Sustained strong directional movement
Investor Sentiment
Positive investor sentiment is a crucial characteristic of high momentum stocks.
Uptrend in s…