6 Rising-Star Momentum Stocks

Staying one step ahead of the market is much easier said than done, but that hasn't stopped investors and academics alike from searching for ways to identify trends in the market. Momentum traders, for example, often implement technical tools like moving averages, relative strength, and Fibonacci retracement to figure out where the market is heading next.

One trend we at the Fool find particularly intriguing is finding newly minted, high-rated stocks in the 110,000 member Motley Fool CAPS community. These are stocks that have received a boost in investor support over the past thirty days and were recently upgraded to either four- or five-star CAPS ratings. Why does this matter? Our research has shown that four- and five-star stocks as a group have outperformed the market, while lowly one-star stocks have underperformed.

So each week we'll reveal a group of stocks recently bestowed with higher CAPS ratings. While these aren't formal recommendations, they could indicate that further research is in order.

Here is this week's list:

Company

Industry

CAPS Rating 30 Days Ago

CAPS Rating as of July 14

CAPS Research

SPDR Gold Shares (NYSE: GLD  )

Exchange-traded fund

***

****

GLD

Hecla Mining (NYSE: HL  )

Silver

****

*****

HL

Citizens Communications (NYSE: CZN  )

Telecommunications

***

****

CZN

General Mills (NYSE: GIS  )

Processed & packaged goods

***

****

GIS

Celgene (Nasdaq: CELG  )

Biotechnology

****

*****

CELG

Onyx Pharmaceuticals (Nasdaq: ONXX  )

Biotechnology

***

****

ONXX

Source: Motley Fool CAPS, as of July 14, 2008.

Come and join us on CAPS to learn more about these and countless other interesting stock ideas. Sign up for free by clicking here.

Todd Wenning hopes The Hills on MTV is on a "dead cross" technical pattern. He does not own shares of any company mentioned. Citizens Communications is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy can't stop, won't stop.


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