5 Stocks With Recent Price Strength to Tap Wall Street Rally

5 Stocks With Recent Price Strength to Tap Wall Street Rally

Nalak Das
7 min read
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Wall Street ended an impressive February, marking the fourth consecutive positive month for all three major stock indexes. Last month, the Dow, the S&P 500 and the Nasdaq Composite – rallied 6.1%, 5.2% and 2.2%, respectively. In fact, the Dow posted its first four-month winning streak since May 2021.

U.S. stock markets have maintained their northward journey in 2024 after witnessing an astonishing 2023. Year to date, the Dow, the S&P 500 and the Nasdaq Composite – have advanced 2.3%, 7.1% and 8%, respectively.

Last week, all three major stock indexes saw the fourth consecutive month of positive ending. These three indexes posted several all-time highs on both an intraday and a closing basis in the first two months of this year.

Wall Street rally is likely to continue. The Department of Commerce reported that the U.S. economy grew at a clip of 3.2% in fourth-quarter 2023, well above the initial consensus estimate of 2%.

U.S. GDP rose 2.5% in 2023 compared with a 1.9% rise in 2022. At the beginning of 2023, the consensus estimate for full-year GDP was 2%. On Mar 1, the Atlanta Fed GDPNow tracker forecast a 2.1% growth rate for first-quarter 2024, indicating, no chance of a near-term recession.

As a result, a few stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — Arm Holdings plc ARM, EMCOR Group Inc. EME, Golden Ocean Group Ltd. GOGL, Interface Inc. TILE and Acuity Brands Inc. AYI.

Here’s How We Arrived at the Picks

We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.

Here’s how you should create the screen to shortlist the current as well as the potential winners.

Screening Parameters:

Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.

Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.

Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.

Current Price greater than 5: The stocks must all be trading at a minimum of $5.

Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.

Just these few criteria narrowed down the search from over 7,700 stocks to eight.

Let’s discuss five out of these eight stocks:

Arm Holdings architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers. ARM offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services.

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