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Making judgement calls on momentum shares

Will these momentum companies power on past the Omicron scare?
Making judgement calls on momentum shares
  • Some familiar companies have ranked highly on this month's momentum screens
  • Five main market and nine Aim companies pass all our tests

Markets clearly have a lot to try and price in on fears of even more restrictive measures to delay the inevitable spread of the Omicron coronavirus.  In such an environment there is always a danger that earnings forecasts are revised suddenly, so our earnings forecast and upgrade momentum screen results could be rapidly undermined and changed. Share prices may reflect the market’s concerns fastest, so the one month momentum test is worth paying particular attention to and most importantly, all screen ideas need to be further scrutinised before buying shares on the strength of them.

Top of the pile on our FTSE All Share screen is luxury retail business Watches of Switzerland Group (WOSG), the company passes all eight tests. It has enjoyed impressive momentum since Robin Hardy took a deep dive into the company in his Alpha report in June, although when Investors’ Chronicle last updated on the company earlier this month, the expanding valuation multiple was becoming more of a concern. 

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