Do you like to trade with a stock's momentum trends? For ideas on how to start your own momentum stock search, we ran a screen.
We began by screening the small-cap sector for stocks with strong recent momentum, trading within 5% of their 52-week highs.
We then screened these names for those with bullish trends from short sellers, with significant decreases in shares shorted month-over-month, indicating that short sellers are less bearish on these names.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these stocks will break through to new highs? Use this list as a starting point for your own analysis.
List sorted by decrease in shares shorted as a percent of share float.
1. Transcend Services, Inc. (TRCR): Provides medical transcription services in the United States. Market cap at $315.54M, most recent closing price at $29.54. The stock is currently trading 2.48% below its 52-week high. Shares shorted have decreased from 2.58M to 1.91M over the last month, a decrease which represents about 7.16% of the company's float of 9.36M shares. Days to cover ratio at 4.62 days.
2. Peet's Coffee & Tea, Inc. (PEET): Operates as a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea in the United States. Market cap at $964.4M, most recent closing price at $73.71. The stock is currently trading 3.45% below its 52-week high. Shares shorted have decreased from 2.76M to 2.44M over the last month, a decrease which represents about 3.08% of the company's float of 10.38M shares. Days to cover ratio at 18.38 days.
3. American Vanguard Corp. (AVD): Engages in the manufacture, development, and marketing of specialty chemical products for agricultural and commercial uses in the United States and internationally. Market cap at $674.51M, most recent closing price at $24.35. The stock is currently trading 4.10% below its 52-week high. Shares shorted have decreased from 2.06M to 1.68M over the last month, a decrease which represents about 1.62% of the company's float of 23.47M shares. Days to cover ratio at 6.32 days.
*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.