ZACKSยท2025-07-25 15:02Market Overview - The U.S. equity markets have reached record highs, driven by strong quarterly earnings across all sectors, particularly from blue-chip technology stocks, highlighting the impact of AI infrastructure spending on investor sentiment [1] - Renewed trade deals between the U.S. and its trading partners have contributed to positive market conditions, with investors looking for clarity on potential interest rate cuts from the Federal Reserve [1] Momentum Investing Strategy - Momentum investing is characterized by the strategy of "buying high and selling higher," based on the belief that stocks with established trends are likely to continue in that direction [3] - This strategy has been shown to generate alpha over time and across various market conditions, although it requires skill in detecting trends [4] Screening Parameters for Momentum Stocks - The screening process identifies the top 50 stocks with the best percentage price change over the last 52 weeks, ensuring selection of stocks that have appreciated steadily [5] - From these, the bottom 10 performers over the past week are chosen to identify those experiencing short-term pullbacks [6] - Stocks with a Zacks Rank 1 (Strong Buy) and a Momentum Style Score of B or better are prioritized, indicating a higher probability of success [7] Selected Momentum Stocks - Netflix (NFLX) has seen an 86.2% increase over the past year but a 7.3% decline in the last week, earning a Momentum Score of A [8] - Robinhood Markets (HOOD) has surged 381.3% in the past year but dropped 3.3% last week, also holding a Momentum Score of A [10] - Affirm Holdings (AFRM) has gained 148.7% annually with a 5.2% decline last week, resulting in a Momentum Score of B [11]