Momentum stocks

Screening Filters

1. Market Cap ≥ $5,000,000,000

   • Purpose: Focus on larger, more established U.S. companies.
   • Rationale:
     • Momentum strategies often work more cleanly in liquid, actively traded stocks where price moves are less likely to be driven by a single large order or manipulation.
     • A $5B+ market cap threshold typically ensures better liquidity, tighter spreads, and more reliable price signals, all of which are important when trading momentum.

2. PriceAboveMA20 (Price above 20-day moving average)

   • Purpose: Capture short-term upward price momentum.
   • Rationale:
     • The 20-day moving average is a common short-term trend indicator.
     • If the current price is above the 20-day MA, it suggests the stock is in a recent uptrend rather than bouncing randomly. This aligns directly with the idea of short-term momentum.

3. PriceAboveMA200 (Price above 200-day moving average)

   • Purpose: Ensure the longer-term trend is also bullish.
   • Rationale:
     • The 200-day MA is a classic long-term trend gauge.
     • Momentum traders typically prefer stocks that are not just spiking short term, but are also in a broader uptrend. Being above the 200-day MA helps avoid names that are in long-term downtrends but having a brief, possibly unreliable rally.

4. RSI Category: “moderate” or “overbought”

   • Purpose: Identify stocks with strong recent buying pressure without limiting to only neutral names.
   • Rationale:
     • Momentum stocks often show elevated RSI because of persistent buying.
     • Including “overbought” recognizes that strong momentum can push RSI high and can persist at high levels for some time.
     • Including “moderate” keeps the screen from being too restrictive and allows for strong trends that are not yet extremely stretched.

5. 1-Month Price Change % ≥ 15%

   • Purpose: Directly target recent high performers.
   • Rationale:
     • A minimum 15% gain over the past month is a clear, quantitative definition of short-term momentum.
     • This filter ensures the screen focuses on stocks that have already demonstrated significant recent strength, rather than slow movers.

6. Exchange: XNYS, XNAS, XASE (NYSE, NASDAQ, AMEX)

   • Purpose: Restrict results to major U.S. exchanges.
   • Rationale:
     • Your question is about “the US stock market,” and these are the primary U.S. stock exchanges.
     • Major exchange listing standards typically imply better reporting, liquidity, and transparency, which are important when implementing a momentum strategy.

Why Results Match Your Request

• The combination of strong recent performance (≥15% in a month), price above both short- and long-term moving averages, and RSI not weak (moderate to overbought) is a classic way to define price momentum.
• Limiting to large-cap stocks on major U.S. exchanges aligns with your focus on the U.S. market and improves the quality and tradability of the momentum names you’ll see.