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Kapitall Strategies: Top 8 Momentum Trades From Today's Session

By: Kapitall
Posted: 8/24/2011 7:52:00 PM
Referenced Stocks: FOSL;NST;PRGO;RRTS;TNH;WCN;WM;YSI

(List compiled by Eben Esterhuizen, CFA)

Strategy: If a stock gains more than 3% since the previous close, buy it, and sell it on the close 10 trading sessions later.

But which of today's big winners might be good candidates for this strategy?

To help you get ideas, we started with a universe of about 200 stocks that have gained by more than 3% since yesterday's close (i.e. strategy candidates).

We went back in time, and evaluated how many times these stocks have rallied like this over the last quarter.

For each backtested rally strategy, we'll also report the average return made on the investment (ignoring transaction costs).

Recent history suggests that these stocks are exhibiting upward momentum, and may add to today's gains. That said, it's important to point out that past performance is no guarantee of future results.

In other words, just because these stocks gained from similar rallies over the last quarter, there is no guarantee that they will do so again today.

As always, use this list only as a starting point for your own analysis.

For each stock listed, we'll also include the annual performance.

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

1. Waste Management, Inc. (WM): Waste Management Industry. At time of writing (3:55pm ET), the stock is up 3.05% since yesterday's close. Over the last quarter, there has been 1 day when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 9.29% over the next 10 trading days. The stock has returned 0.44% over the last year.

2. Terra Nitrogen Company, L.P. (TNH): Agricultural Chemicals Industry. At time of writing (3:55pm ET), the stock is up 4.31% since yesterday's close. Over the last quarter, there have been 9 days when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 6.96% over the next 10 trading days. The stock has returned 109.49% over the last year.

3. Waste Connections Inc. (WCN): Waste Management Industry. At time of writing (3:55pm ET), the stock is up 4.44% since yesterday's close. Over the last quarter, there has been 1 day when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 6.18% over the next 10 trading days. The stock has returned 28.84% over the last year.

4. U-Store-It Trust (YSI): REIT Industry. At time of writing (3:55pm ET), the stock is up 3.69% since yesterday's close. Over the last quarter, there has been 1 day when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 6.14% over the next 10 trading days. The stock has returned 32.32% over the last year.

5. Perrigo Co. (PRGO): Drug Related Products Industry. At time of writing (3:55pm ET), the stock is up 3.33% since yesterday's close. Over the last quarter, there has been 1 day when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 6.09% over the next 10 trading days. The stock has returned 58.29% over the last year.

6. Fossil, Inc. (FOSL): Recreational Goods Industry. At time of writing (3:55pm ET), the stock is up 7.17% since yesterday's close. Over the last quarter, there have been 5 days when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 5.04% over the next 10 trading days. The stock has returned 94.95% over the last year.

7. NSTAR (NST): Electric Utilities Industry. At time of writing (3:55pm ET), the stock is up 4.13% since yesterday's close. Over the last quarter, there has been 1 day when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 3.41% over the next 10 trading days. The stock has returned 17.77% over the last year.

8. Roadrunner Transportation Systems, Inc. (RRTS): Air Delivery & Freight Services Industry. At time of writing (3:55pm ET), the stock is up 9.48% since yesterday's close. Over the last quarter, there have been 5 days when the stock gained more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 2.58% over the next 10 trading days. The stock has returned 13.99% over the last year.