Technology featured highlights include: MarketAxess, Domino's Pizza and Neurocrine Biosciences

For Immediate Release

Chicago, IL – July 24, 2020 – Stocks in this week’s article are MarketAxess Holdings Inc. MKTX, Domino's Pizza, Inc. DPZ and Neurocrine Biosciences, Inc. NBIX.

3 Stocks with Momentum Anomalies to Buy This Earnings Season

The growth picture for second-quarter earnings is pretty weak, with S&P 500 earnings expected to decline the most since the 2008 recession. Also, most companies are still unable to provide guidance on account of pandemic-driven uncertainties.

But it isn’t all doom and gloom as we are starting to see some early signs of improvement in earnings estimates for the current period and beyond. The recent flow of economic readings has broadly been positive, suggesting that the longed-for recovery is in place. However, the concern is that the surge in new infections will derail the momentum.

Investors should remember that the secret to making money, regardless of market conditions, is to buy stocks that have been burned but still have the potential to soar. Wall Street ended higher on Jul 22, with the Dow up 0.62%, the S&P up 0.58% and the Nasdaq up 0.24%, after mixed corporate earnings results and stimulus negotiations in Washington.

Against this backdrop, reacting hastily to volatile trends can cause more damage to an investor’s portfolio returns than an actual downturn. When value or growth investing fails to fetch sustained profits, one should explore another time-tested winning strategy that simply bets on frontrunner stocks. This is known as momentum investing.

At the core, momentum investing is about buying high, selling higher. It is based on the idea that once a stock establishes a trend, it is likely to continue in that direction. There’s a whole list of behavioral biases that most investors exhibit. For instance, some investors are anxious about booking losses and hence hold on to losing stocks for too long, hoping for a rebound in prices.

Meanwhile, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid such mistakes. So, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Thus, momentum investing is based on that gap in time, which exists before the mean reversion occurs i.e. before prices become rational again.

Here, we have created a strategy that will help investors get in on these fast movers when there is a short-term pullback in price and rake in handsome gains.

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Dominos Pizza Inc (DPZ): Free Stock Analysis Report

Neurocrine Biosciences, Inc. (NBIX): Free Stock Analysis Report

MarketAxess Holdings Inc. (MKTX): Free Stock Analysis Report

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