Buy 3 Momentum Anomaly Stocks as Markets Hit Consecutive Record Highs

The broader U.S. equity markets kicked off 2026 on a strong note, notching two consecutive days of record highs, courtesy of spirited performance by some blue-chip tech firms and a spike in energy stocks. While the technology stocks were buoyed by the renewed enthusiasm related to AI and its inherent growth potential, the energy sector was boosted by optimism regarding stability in crude oil prices following the recent U.S. attack on Venezuela. 

Investors broadly expect that the rebuilding of Venezuela’s oil infrastructure will benefit the overall industry and optimize the supply chain dynamics in the region without spilling into a broader geopolitical conflict. Amid the vagaries of the market, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like General Motors Company GM, NVIDIA Corporation NVDA and Mercury General Corporation MCY when value or growth investing fails to generate the desired profits.

This approach primarily tends to follow the adage, “the trend is your friend.” At its core, momentum investing is “buying high and selling higher.” It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.

Momentum strategies have been known to be alpha-generative over a long period and across market stages. Therefore, this strategy is quite tricky to implement, as detecting these trends is no child’s play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from long-term price momentum and a short-term pullback in price.

Screening Parameters for Momentum Anomaly Stocks

Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.

Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.

Zacks Rank #1: Stocks sporting a Zacks Rank #1 (Strong Buy) have a proven history of outperformance irrespective of the market conditions. You can see the complete list of today’s Zacks #1 Rank stocks here.

Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process, as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.

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

Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price. 

Average 20-Day Volume greater than 100,000: A substantial trading volume ensures that these stocks are easily tradable.

Here are three of the five stocks that made it through this screen:

Headquartered in Detroit, General Motors, along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands — Chevrolet, Buick, GMC and Cadillac. General Motors assembles passenger cars, crossover vehicles, light trucks, sport utility vehicles (SUVs), vans and other vehicles.

The stock has jumped 58.1% in the past year but declined 0.2% in the past week. General Motors has a Momentum Score of B.

Santa Clara, CA-based NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.  

The stock has soared 33.6% in the past year but lost 0.2% in the past week. NVIDIA has a Momentum Score of A.

Headquartered in Los Angeles, CA, Mercury General operates as an insurance holding firm, primarily engaging in writing personal automobile lines of business and providing related property and casualty insurance products to its customers through 12 subsidiaries in 11 states, principally in California. The company also offers homeowners, commercial automobile, commercial property, mechanical protection, fire and umbrella insurance.

The stock has soared 36% in the past year but lost 6.2% in the past week. Mercury General has a Momentum Score of B.

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This article originally published on Zacks Investment Research (zacks.com).

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