Skip to main content

What are we looking for?

U.S. large-cap stocks showing price momentum across multiple time frames.

We changed our view to bullish on the S&P 500 after the index broke above a short-term consolidation zone and key resistance at 2,950. The index also broke above its 50-day moving average, another bullish technical event.

In light of our bullish view of U.S. equity markets, we followed our top-down methodology and looked for large-cap stocks showing strong upward momentum in anticipation of a breakout to record highs in U.S. indexes.

Story continues below advertisement

The screen

We will be using Trading Central Strategy Builder to screen for U.S. large-cap stocks demonstrating strong upward price momentum. We will start by screening for U.S. stocks with a market capitalization of at least US$15-billion. This will limit our search to the largest and most stable companies in the market.

Next, we will search for stocks demonstrating price momentum across multiple time horizons. We will screen for a five-day price performance of more than 2 per cent, 13-week price performance greater than 10 per cent and a year-to-date performance of at least 20 per cent.

The current price-to-earnings ratio of the S&P 500 is at 19.6, therefore we want stocks at or below that level to keep valuations at a reasonable level relative to the market.

Finally, we were interested in stocks that are trading within 5 per cent of their 52-week highs because stocks making new highs usually continue to do so over the next six months because of strong price momentum.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Trading Central’s product suite provides actionable trading ideas based on technical and fundamental research covering stocks, ETFs, indexes, forex, options and commodities.

What did we find?

Topping our list is telecom and media conglomerate AT&T Inc. The stock has just broken above its 200-week moving average, which is a strong bullish technical signal. Note also that AT&T has the highest dividend yield on our list, at 5.3 per cent. The company has been in financial headlines recently after activist investment firm Elliot Management Corp. disclosed an investment of US$3.2-billion in the company. While Elliot Management called for strategic changes identified in a four-step plan, the firm expressed deep conviction in the value of AT&T’s future, which has helped to propel the stock higher this week.

The stock with the largest market cap on our list is tech giant Apple Inc., which has seen an impressive price gain of 41.7 per cent year-to-date. With a P/E of 19 and momentum on the upside, the stock is on its way to test October highs. This week the company showcased the new iPhone 11 Pro and other devices, as well as TV+, its new video-streaming service that will be offered at a lower monthly subscription fee than competitors such as Walt Disney Co., Amazon.com Inc. and Netflix Inc.

Story continues below advertisement

Select U.S. large-cap momentum stocks

RankCompanySymbolMkt. Cap. (US$ Bil.) 5D Price Perf. (%)13W Price Perf. (%)YTD Price Perf. (%)1Y Price Perf. (%)P/EChg. from 52W High (%)Div. Yield (%)Recent Price (US$)
1AT&T Inc.T-N280.08.520.435.715.816.50.05.338.74
2Eaton Corp. PLCETN-N36.911.211.928.22.617.1-1.63.288.03
3Parker Hannifin Corp.PH-N23.61311.923.71.216.1-4.51.9184.46
4Sun Life Financial Inc.SLF-N25.54.710.630.812.114.5-0.13.643.42
5T. Rowe Price Group Inc.TROW-Q28.08.213.430.17.915.10.02.5120.09
6Apple Inc.AAPL-Q1,010.06.915.141.70.719.0-4.21.4223.59
7Celanese Corp.CE-N15.39.219.338.27.715.40.02.0124.31
8Lam Research Corp.LRCX-Q33.65.630.171.950.617.1-0.32.0234.01
9Applied Materials Inc.AMAT-Q47.64.124.257.531.216.4-1.61.651.56
10NXP Semiconductors NVNXPI-Q30.6817.350.123.617.0-0.51.4110.00

Source: Trading Central

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.

Gary Christie is head of North American research at Trading Central.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter