Just like a surfer waiting for the perfect swell, investors are always on the lookout for stocks that are gaining momentum. This strategy, known as momentum investing, focuses on price movements rather than traditional labels like “value” or “growth.” The goal is simple: find stocks that are rising and ride the wave until it fades.
In this analysis, we have identified six ASX-listed companies across large, mid, and small-cap categories that are currently showing strong momentum. Our selection is based on a straightforward screening process using five key signals.
Screening for Momentum Stocks
Our momentum stock screen includes the following criteria:
- Positive six-month price change: The stock price must have increased over the past six months.
- Outperforming the ASX 200/Small Ords: The stock must have outperformed the index in the prior six months.
- Above the 50-day moving average: This ensures the short-term upward trend is still in place.
- Not overbought: The Relative Strength Indicator (RSI) must not exceed 70.
- Bullish Trading Central view: The stock must have a “bullish” or “rising prices” rating from this independent research provider.
While the RSI and other technical indicators provide valuable insights, they are not foolproof. They should be used in conjunction with other factors like price trends and relative performance.
Large Cap Leaders
Charter Hall Group (ASX: CHC)
Charter Hall Group, a leading diversified property investment and funds management company, manages nearly $85 billion in funds. The stock has outperformed the ASX by nearly 30%, with an RSI of 57, indicating it remains in the neutral zone.
Trading Central sees momentum remaining bullish with key resistance at $21.80. A break above this level could push the stock toward targets of $24.20 and $25.70.
Charter Hall benefits from growing property values and rising demand for office spaces, alongside potential interest rate cuts.
JB Hi-Fi (ASX: JBH)
As Australia’s largest home entertainment retailer, JB Hi-Fi has outperformed the ASX by over 25% within the last six months. Its RSI of 51 indicates a neutral position, suggesting it’s not overbought.
Trading Central identifies an important pivot point at $110.92. If it holds above this level, the next price target is $123.63.
JB Hi-Fi continues to benefit from strong consumer demand for electronics and a growing Australian population.
Mid Cap Movers
Catapult Sports (ASX: CAT)
Catapult, a global leader in sports data and analytics, has seen its share price soar by more than 93% in the past six months. The company’s RSI of 65 approaches overbought levels, yet technical fundamentals remain supportive.
Trading Central sees the medium-term upside prevailing as long as the stock holds 6.33 as support.
Catapult’s recent earnings report revealed a 19% revenue growth and an all-time high EBITDA margin of 31%.
Lovisa Holdings (ASX: LOV)
Established in 2010, Lovisa has rapidly expanded in the fashion accessories market with over 1,000 stores worldwide. The company has outperformed the ASX 200 by nearly 50%, maintaining an RSI of 53.
Trading Central notes that as long as the stock holds at $37.17, it may rally to $42.74.
Lovisa’s strong start to the fiscal year, with comparable sales up more than 5%, underscores its momentum.
Small Cap Standouts
Motorcycle Holdings (ASX: MTO)
Motorcycle Holdings, a leading retailer and distributor of motorcycles, has surged 111% over the past six months, far outpacing the Small Ordinaries Index’s 22% gain. Its RSI is at a neutral 50.
Trading Central sees the next targets at $3.89 and $4.01 if the stock climbs back above $3.70.
The company delivered record results in FY25, with sales revenue of $650 million and a 27.7% growth in after-tax profit.
Cedar Woods Properties (ASX: CWP)
Cedar Woods, a diversified property company, has outperformed the Small Ordinaries by nearly 37% in the last six months, with its RSI at 14.
Trading Central eyes $7.30 as a key support level, with potential rallies to $7.89 and beyond $8.
The company is a primary beneficiary of surging housing demand, reporting an 18.9% increase in net profit after tax for FY25.
Final Thoughts
While technical analysis provides a snapshot of current momentum, it’s essential to remember that market conditions can change rapidly. Investors should stay vigilant and manage risks effectively, using tools like stop and limit orders. This assessment focused on technical indicators to highlight stocks with strong momentum, but a comprehensive investment strategy should consider a broader range of factors. We invite readers to share their thoughts and suggest other indicators they would like us to explore in future analyses.
