How to Identify Momentum Stocks

We have reorganized our scans of sector indices to enable users to more easily identify top-performing momentum stocks.

The example below is for US stocks . There are separate pages for:

• Australian (ASX) stocks

More about Momentum

Momentum measures the rate of gain (or loss) and provides an easy way to compare performance of sectors, industries, sub-industries and their component stocks.

Find out more about our favorite oscillator at Twiggs Momentum.

There is also a series on academic research into Momentum Trading, written by Dr Bruce Vanstone.

Scan Sectors & Industries

The example here scans for US stocks. There is a copy of the scan saved (#123578) on the Shared tab or you can set it up yourself as shown below.

• Open the Stock Screener (Securities >> Stock Screen on the chart menu or type "X" on your keyboard)
• Set up the filters:
  1. Exchange: US Indices
  2. Index: S&P 1500 Sub-Industries
  3. Add the indicator: Twiggs Momentum 100-Day, Minimum 20
  4. Click the Run Screen button
• Order the Returned list by clicking on the header [1] and select the first line [2]
  
• Hit Enter or click on the highlighted line to open an index chart
• Scroll the returned list of indices using the up/down arrows on the toolbar or on your keyboard
  

Select Top-Performing Industries

• Scroll through the industry charts, looking for recent breakouts. Ideally Twiggs Momentum (100-Day) should have crossed above 20 and the index should make a new long-term high.
  
• Ignore if Twiggs Momentum is below, or whipsawing around, its 100-Day Moving Average.
  

Scan for Momentum Stocks

Select a suitable index (e.g. Iron & Steel) and run a second scan for component stocks with strong momentum:

• Set up the filters to scan the selected Iron & Steel sub-industry:
  1. Exchange: US Stocks
  2. Sector: Iron & Steel
  3. Index: S&P 1500
  4. Add the indicator: Twiggs Momentum 100-Day, Minimum -99 (normally 20 but you want to see all stocks in the sub-industry)
  5. Click the Run Screen button
• Order the Returned list by clicking on the header [1] and select the first line [2]
  
• Hit Enter or click on the highlighted line to open a stock chart
• Scroll the returned list of stocks using the up/down arrows on the toolbar or on your keyboard
  

Select Top-Performing Stocks

Select individual stocks using similar criteria — rising Momentum and new long-term highs:

Olympic Steel (ZEUS) shows a strong up-trend.

Carpenter Technology (CRS) shows a more recent breakout.