In the world of short-term investing or trading, the adage “the trend is your friend” rings true. But the real key to success lies in timing your entry into the trend. Making sure a trend is sustainable isn’t always easy, as trends often reverse before you can exit your trade, leading to losses. To ensure profitable trades, you need to identify factors that indicate a trend’s staying power. These factors could include solid fundamentals, positive earnings estimate revisions, or other indicators that suggest the stock’s momentum will continue.
Our “Recent Price Strength” screen, based on a unique short-term trading strategy, can be invaluable for identifying these trends. This pre-defined screen helps you quickly narrow down the list of stocks that have the fundamental strength needed to maintain their recent uptrend. It only includes stocks trading in the upper portion of their 52-week high-low range, a classic indicator of bullishness.
One stock that recently passed this screen is Investar (ISTR). Here’s why this holding company for Investar Bank stands out as a strong choice for trend investing:
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Consistent Price Increase:
A sustained price increase over a period of time reflects investor confidence in a stock’s potential upside. ISTR has shown this strength, gaining 19.2% over the past 12 weeks. However, looking at the price change over a longer period is not enough; you need to consider shorter timeframes to catch potential trend reversals.*
Strong Short-Term Momentum:
ISTR has continued its upward trend with a 1.5% increase over the past four weeks, demonstrating that the momentum remains intact. This indicates the stock is not showing any signs of a reversal.*
High Trading Range:
ISTR is currently trading at 98.6% of its 52-week high-low range. This suggests the stock is nearing a breakout point, potentially leading to further price gains.*
Solid Fundamentals:
ISTR carries a Zacks Rank #2 (Buy), indicating it ranks among the top 20% of the over 4,000 stocks evaluated by Zacks. This ranking is based on trends in earnings estimate revisions and EPS surprises, key indicators of a stock’s near-term price performance. The Zacks Rank system has an impressive track record, with Zacks Rank #1 stocks averaging a 25% annual return since 1988.*
Positive Broker Sentiment:
The brokerage community is highly optimistic about ISTR’s near-term price performance, giving it an Average Broker Recommendation of #1 (Strong Buy). This further supports the stock’s fundamental strength.Given ISTR’s strong price trend, positive fundamentals, and favorable broker sentiment, it’s reasonable to anticipate the stock’s momentum will continue in the near future. This makes ISTR a compelling option for investors seeking short-term opportunities with a solid foundation.
