U.S. stock markets have continued their northward journey in 2025 following an impressive rally over the previous two years. All three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are currently hovering near their all-time highs.
Expectations for the first interest rate cut in 2025 by the Fed in its September FOMC meeting have skyrocketed, following the release of tepid nonfarm payrolls data for August. The CME FedWatch interest rate derivative tool currently shows a 100% probability of a 25-basis-point rate cut this week.
Consequently, several stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. Such stocks have a high chance of carrying the momentum forward.
Five such stocks are — DRDGOLD Ltd. DRD, Daktronics Inc. DAKT, NCS Multistage Holdings Inc. NCSM, Build-A-Bear Workshop Inc. BBW and Vishay Precision Group Inc. VPG.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners.
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to 20.
Let’s discuss five out of these 20 stocks here:
DRDGOLD is a medium-sized, unhedged gold producer with investments in South Africa and Australasia. DRD sells gold and silver bullion. DRD recently concluded extensive refocusing of its gold interests.
