NMC Health

NMC Health, which has already been mentioned earlier, is a good example of a company that has experienced positive momentum. Since the start of 2018, it has been in a steady uptrend, with strong upwards momentum.

To identify individual instances of positive momentum, an investor can use the Momentum Technical Indicator (illustrated in the bottom half of the chart below). Every time momentum is positive, indicator moves north, creating an area shaded in blue. When momentum starts to slow down, the indicator starts dipping, which is a strong signal for investors to either re-evaluate their positions, or to exit the trade entirely.

On the chart below, three individual instances of positive momentum are identified by correlating momentum indicator with share price movement.

Source: CMC Markets, Date: 31.05.2018

• Between January 2 and January 29, NMC Health share price rose 14.5%, which can be correlated with the rise and fall of the momentum indicator.
• Momentum Indicator rising or falling can be a compelling buy or sell signal for short-term investors.
• There are additional periods of positive momentum in late April and late May, also correlated to the Momentum Indicator moving from neutral position into positive.
• Overall, the share price maintained an upward trend, meaning that investors could either buy-and-hold the security (estimated +30% YTD), or trade the security multiple times using individual “momentum windows” for potentially higher overall return.

Continue reading to find out more about our 5 top stocks that have been experiencing positive momentum in 2018.