When it comes to short-term investing or trading, the adage “the trend is your friend” holds true. Identifying and profiting from sustainable trends can be highly lucrative. However, ensuring the longevity of a trend can be challenging, as stock prices can quickly reverse direction, leading to short-term losses for investors.
To mitigate these risks, it’s crucial to identify stocks with strong fundamentals, positive earnings estimates, and other factors that can sustain their momentum. The “Recent Price Strength” screen, based on a unique short-term trading strategy, can be an invaluable tool in this regard. This screen effectively filters stocks with the necessary fundamental strength to maintain their upward trajectory. It focuses on stocks trading in the upper portion of their 52-week high-low range, a telltale sign of bullishness.
Coca-Cola European Partners (CCEP) is a notable stock that has passed this screen. Here’s why it’s a compelling choice for “trend” investing:
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Consistent Price Growth:
CCEP has exhibited a solid price increase over the past 12 weeks, demonstrating continued investor willingness to pay a premium for its potential upside. The stock has gained 4.6% during this period. However, examining only a three-month window might not reveal shorter-term price fluctuations. Therefore, looking at recent price movements is crucial.*
Sustained Trend:
CCEP has maintained its upward trend with a price increase of 3.8% over the past four weeks. This consistency reinforces the stock’s bullish momentum.*
High Trading Range:
CCEP is currently trading at 97.2% of its 52-week high-low range, indicating a potential breakout and further upward movement.*
Strong Fundamentals:
CCEP boasts a Zacks Rank #2 (Buy), signifying its placement within the top 20% of over 4,000 stocks ranked based on earnings estimate revisions and EPS surprises, crucial factors influencing short-term price movements. The Zacks Rank stock-rating system, which categorizes stocks into five groups (from #1 Strong Buy to #5 Strong Sell), has an impressive track record, with Zacks Rank #1 stocks achieving an average annual return of +25% since 1988.*
Positive Broker Sentiment:
The Average Broker Recommendation for CCEP stands at #1 (Strong Buy), indicating that the brokerage community is highly optimistic about the stock’s near-term performance.The combination of a sustained price trend, positive fundamental indicators, and robust broker sentiment suggests that CCEP is a strong candidate for short-term investors seeking to capitalize on a favorable market environment.
