Most of us have heard the saying “trend is your friend”. And this is undeniably the key to success when it comes to short-term investing or trading. But it is not easy to ensure the sustainability of a trend and to profit from it.
Often, the direction of a stock’s price action reverses quickly after taking a position, causing investors to experience a short-term loss of capital. As such, it’s important to ensure that there are enough factors — like solid fundamentals, positive earnings estimate revisions, etc. — that could sustain the stock’s momentum.
Investors looking to take advantage of stocks that are currently moving may find our Current Price Strength screen very useful. This predefined screen comes in handy for spotting stocks that are in an uptrend supported by strong fundamentals and trading at the top of their 52-week high-low range, which is usually an indicator of bullishness.
There are several stocks that have passed the screen and Sumitomo Mitsui (SMFG) is one of them. Here are the main reasons why this stock is a solid pick for “trend” investing.
Solid price gains over a 12-week period reflect investors’ continued willingness to pay more for a stock’s potential upside potential. SMFG fits in pretty well in this regard, gaining 54.6% over the period.
However, it is not enough to look at the price change for about three months as it does not reflect a trend reversal that may have occurred on a shorter time frame. Maintaining the price trend is important for a potential winner. A price increase of 7.8% in the last four weeks ensures that the trend in this bank’s shares continues.
Additionally, SMFG is currently trading at 90.4% of its 52-week high-low range, suggesting it could be on the verge of a breakout.
Looking at fundamentals, the stock currently has a Zacks rank of #1 (Strong Buy), meaning it is in the top 5% of more than 4,000 stocks we have ranked based on trends in earnings estimate revisions and Earnings per share surprises rank key factors influencing a stock’s short-term price movements.
The Zacks Rank stock rating system, which uses four factors related to earnings estimates to categorize stocks into five groups ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive, externally verified track record , featuring Zacks Rank #1 stocks generating a compound annual return of +25% since 1988. You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor confirming the company’s fundamental strength is its average broker rating of #1 (strong buy). This suggests that the brokerage community is very bullish on the stock’s near-term price action.
Therefore, the price trend at SMFG may not reverse any time soon.
In addition to SMFG, there are several other stocks currently looping through our Current Price Strength screen. You can consider investing in them and look for the latest stocks that meet these criteria.
This isn’t the only screen that could help you find your next winning stock pick. Based on your personal investing style, you can choose from over 45 Zacks Premium Screens strategically created to beat the market.
However, remember that the key to a successful stock picking strategy is making sure it has a history of producing profitable results. It’s easy to do with the Zacks Research Wizard. The program not only allows you to test the effectiveness of your strategy, but also includes some of our most successful stock picking strategies.
Click here to sign up for a free trial of Research Wizard today.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts have each selected their favorite, which will skyrocket by +100% or more in the coming months. From these 5, Research Director Sheraz Mian selects one that has the most explosive perk of all.
It’s a little-known chemical company that’s up 65% year over year, but it’s still dirt cheap. With continued demand, rising earnings estimates for 2022 and $1.5 billion in share buybacks, retail investors could jump in at any time.
This company could match or outperform other recent Zacks stocks set to double, such as Boston Beer Company, up +143.0% in just over 9 months, and NVIDIA, up +175.0% in a year, 9% boomed.
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Sumitomo Mitsui Financial Group Inc (SMFG): Free Stock Research Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.