The markets are back! After last week’s pullback, they’re on their way to a full recovery…
And with that resurgence came plenty of huge wins!
Galecto Inc. (NASDAQ: GLTO) soared 410%* in less than half an hour yesterday morning.
Take a look at that spike…
GLTO Intraday, 5-Minute Candle Chart; SteadyTrade
Want to learn to catch stocks like GLTO before they skyrocket?
Mark your calendar for November 14th and 15th!
My good friend and seasoned penny stock trader, Tim Sykes, is teaming up with his millionaire student, Bryce Tuohey, to host a FREE 2-day “Trade Like Tim Sykes” Bootcamp, and you’re invited.
What made the GLTO so powerful? And why do certain stocks seem to attract all the attention, all the volume, and all the potential, while others just drift sideways?
If you’re tired of staring at flat charts and missing explosive moves, keep reading…
Table of Contents
What Are Momentum Stocks?
Momentum stocks are the runners. They’re the high-volume, high-energy names that move fast and make headlines.
These are the stocks that spike 50%, 100%, even 200%+ in a single session, sometimes before the bell even rings.
Unlike boring, sideways stocks that barely move for days, momentum stocks are alive. They’re surging. They often have:
- Big news (earnings, contracts, FDA approvals, sector buzz)
- Low float, which makes them easier to move
- Sector hype or sympathy momentum (think AI, Bitcoin, Rare Earths, etc.)
- And most importantly, buyers are flooding in
When everything lines up, a momentum stock can feel like there’s no top in sight, what I call a “blue sky” breakout with nothing but upside ahead.
GLTO: A Case Study in Momentum
Let’s go back to GLTO, the perfect example of what momentum looks like in real time.
News dropped at 7:00 a.m., and the stock took off, going from $5.17 to $26.38 in pre-market trading, for a gain of over 400%*.
That’s how wild these stocks can be…
And with a good charting strategy and discipline, even a failed setup can offer opportunities for a second or third leg higher.
Why We Love Momentum Stocks
So why should you care about momentum stocks, especially if you’re trading with a small or medium account?,
Because this is where real opportunity lives.
I’d rather have the constant drip of a leaky faucet in the middle of the night than sit and trade a stock that moves two cents a day. Sideways action kills momentum traders mentally and financially.
Momentum stocks offer:
- Rapid gains, if you’re on the right side of the move
- Repeatable setups
- Clear patterns based on volume, news, and price action
- Sector tailwinds from hot trends like AI, crypto, or EVs
These are the trades that could increase your account as long as you manage them correctly.
But There’s a Catch…
Let’s not ignore the dark side of momentum trading.
They Move Fast In Both Directions:
Just as quickly as a stock can go up, it can drop. And if you don’t have a clearly defined stop, you’re toast. It’s easy to get caught in the hype, only to watch the stock pull back violently.
It’s Time-Intensive:
I’ve been doing this for years, and I still spend hours of my day in front of the screens. I’m up at 4:30 a.m., coffee in hand, watching pre-market action by 5:00. If you’ve got a full-time job, kids, or other commitments, it’s tough.
Momentum trading rewards preparation. It doesn’t wait for you to catch up.
You Need Discipline:
So many traders fail simply because they refuse to take a loss. They buy into a spike, watch it reverse, and instead of cutting the trade, they start justifying it. Worse, they add to the loser.
Before you know it, you’re stuck in a massive drawdown, and now you’re the bag holder.
If you don’t have that discipline muscle, build one. Meditate. Do whatever it takes. But don’t trade momentum stocks without a plan and self-control.
Momentum Isn’t Just for Penny Stocks
A lot of the time, we’re talking about small-cap junk runners. But even “real” stocks, those $50 or $100 names with good financials, can become momentum plays when the timing is right.
When institutions, hedge funds, and pensions start buying in on strong earnings or hot news, those stocks can move big, too.
My Final Thoughts…
Momentum stocks are exciting, profitable, and dynamic, but only if you approach them with a solid plan. That means:
- A defined entry strategy
- A stop loss based on the chart
- A realistic profit target
- And the discipline to execute all three
Like Mike Tyson once said, “Everyone has a plan until they get punched in the face…”
But if you’ve thought through your plan and accepted the risks, you’re in a much better position to survive and thrive.
So, if you’re looking for an opportunity in this wild market, momentum stocks could be the key…
Just go in with eyes wide open.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
We’re in the heat of earnings season, so be wary of this scam.
The market often overreacts to earnings misses, but you can capitalize on it.
Trade like a true American with these tickers.