Best momentum stocks to buy this year

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Updated on Aug 14, 2024

Reading time 2 minutes

Momentum stocks are shares that experience significant gains over a given period.
When pullbacks occur, they create exciting opportunities to buy.
Dillard’s and Encore Wire could be among the best picks for momentum stocks this year.

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Momentum stocks present investors with an opportunity to ride the trend, whether downwards or upwards. Here are our top picks from last year that we think could be exciting in 2022.

Dillard’s

Dillard’s Inc. (NYSE:DDS) shares spiked more than 600% last year through the 3rd of November before pulling back to a net gain of about 330%. The stock still trades at an attractive P/E of 8.86, thus leaving room for more gains.

Therefore, 2022 could be a good time to bet on the stock.

Technically, the stock seems to have recently bounced off the trendline support to surge towards the trendline resistance.

Therefore, with shares far from reaching overbought conditions, investors could target profits at about $275.72 or higher at $295.74, while $236.45 and $217.97 are support levels.

Encore Wire

Encore Wire Corp (NASDAQ:WIRE) shares have been up nearly 137% over the last 12 months. However, the stock still trades at an exciting P/E ratio of 6.89, making it attractive to bargain hunters.

Moreover, analysts expect its EPS to grow by about 33% this year, thus attracting growth investors. Therefore, Encore Wire presents the perfect opportunity to ride the trend.

Technically, the stock seems to be trading within an ascending channel formation in the intraday chart.

However, with shares far from reaching overbought conditions, investors could target extended gains at about $147.32 and $153.28, while $134.78 and $128.83 are support levels.