When no clear news drives a stock price, momentum often comes from technical factors or market psychology.
Here are a few specific examples…
Technical Breakouts:
Sometimes, a stock breaks through a significant technical level. The market, particularly technical traders, are watching key areas like resistance, support, or moving averages.
Read my recent blog post for more on support and resistance levels.
Low Float Stocks:
Stocks with a low float (the number of shares available for trading) are particularly susceptible to big moves on little volume. In these cases, it doesn’t take much buying pressure to send the stock soaring.
Sector Sympathy:
A stock can ride momentum simply because it’s part of or somehow associated with a hot sector that’s running.
For example, if NVIDIA Corp (NASDAQ: NVDA) is on fire, other chip manufacturers, AI stocks, or even the smaller, lesser-known tickers in related sectors can catch a bid.
Short Squeezes:
If a heavily shorted stock starts to move up, shorts may panic and cover their positions to avoid further losses.
Called a short squeeze, their buying adds fuel to the fire, driving the stock even higher.
Speaking of short squeezes, I publish a Weekly Squeeze Report every Thursday evening, which is part of my Daily Income Trader System.
This report gives all the information you need to trade on a potential squeeze I see coming on Friday.
My win rate is really good, if I do say so myself.
Every trader should know when they see a stock moving whether it’s due to real news or just momentum.
Each morning, during my Premarket Prep session, I check to see what’s driving a stock’s price, whether it’s actual news or momentum.
Fortunately, StocksToTrade offers an excellent service that tells me all I need to know ahead of a trade, including exactly why a stock is on the move.
It’s called Breaking News Chat.
BNC is a financial news chatroom led by veteran Wall Street traders, each with over 20 years of experience. They filter out all the noise and give traders only the information they need.
So when a stock is running up, BNC tells us exactly why, and most of the time, before the rest of the market can catch it.
With all the crazy stock action that emerged after the election, BNC has been working overtime recently…
Let’s take a look at some recent trades it nailed…
On Election Day, November 5th, BNC alerted us to news about Zoomcar Holdings Inc. (NASDAQ: ZCAR).
And then on November 15th, CERo Therapeutics Holdings Inc. (NASDAQ: CERO) stock started moving on an FDA clearance, but BNC was ahead of it:
Forte Biosciences Inc. (NASDAQ: FBRX) had private placement news on November 22nd, which we knew about before the market reacted, thanks to BNC:
And November 18th was a big day as we had alerts on two huge gainers…
First was HCW Biologics Inc. (NASDAQ: HCWB), which gapped higher on the announcement of a licensing agreement:
Then there was Bakkt Holdings Inc. (NYSE: BKKT), which started running late in the day on news related to Donald Trump’s social media company, Trump Media and Technology Group (NASDAQ: DJT).
Just like Oracle, our algorithmic trading tool, I really don’t know how I’d trade without Breaking News Chat.
Get ahead of the market with Breaking News Chat!
To learn more about trading stocks that are running on either news or momentum, join our StocksToTrade community.
We have tons of free live webinars that run all day and offer trading tips and tricks and other valuable training.
And for more mentorship on day and swing trading, stock ideas, and more, join my StocksToTrade Advisory service.
Every STT Advisory member gets a monthly newsletter with a list of my top picks, three weekly videos with my watchlists, bonus reports, and more.
Sign up for StocksToTrade Advisory right here!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade