In the world of short-term investing and trading, the adage ‘the trend is your friend’ holds true. However, ensuring the sustainability of a trend to capitalize on it is a delicate dance. Trends often reverse before investors can exit their trades, resulting in short-term losses. To mitigate this risk and achieve profitable trades, it’s crucial to examine factors like solid fundamentals, positive earnings estimates, and other indicators that can sustain momentum.
Our ‘Recent Price Strength’ screen, built upon a unique short-term trading strategy, helps pinpoint stocks with the fundamental strength to maintain their recent uptrend. This screen filters for stocks trading in the upper portion of their 52-week high-low range, a hallmark of bullish sentiment.
Sabesp (SBS), a Brazilian water and sanitation company, emerged as a standout candidate from this screen. Here’s why SBS presents a compelling opportunity for trend-following investors:
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Consistent Price Appreciation:
Over the past 12 weeks, SBS has shown a consistent price increase, reflecting investors’ confidence in its potential for future growth. The stock has gained 24.1% during this period, demonstrating sustained demand.*
Sustained Upward Trend:
It’s not enough to simply look at price changes over a longer timeframe; a shorter-term perspective is also crucial to detect any potential trend reversals. SBS has maintained its upward trend with a price increase of 19.4% over the past four weeks.*
Breakout Potential:
Currently trading at 96.3% of its 52-week High-Low Range, SBS is poised for a potential breakout. This signifies strong bullish momentum and further price appreciation potential.*
Strong Fundamentals:
SBS boasts a Zacks Rank #1 (Strong Buy), placing it among the top 5% of over 4,000 stocks ranked by our system. The Zacks Rank, which incorporates factors like earnings estimate revisions and EPS surprises, has a proven track record of success, with Rank #1 stocks delivering an average annual return of +25% since 1988.*
Broker Confidence:
The brokerage community shares this bullish outlook, assigning SBS an Average Broker Recommendation of #1 (Strong Buy). This indicates a high level of optimism regarding the stock’s near-term price performance.With its robust price trend, solid fundamentals, and positive analyst sentiment, Sabesp (SBS) presents a compelling investment opportunity for those seeking to capitalize on short-term trends.
