Momentum investing can yield best returns when the trend is clearly defined and robust. The main assumption or belief is that when a trend develops, it persists for some time for investors to make an entry or exit.
Though investing in Top High Momentum Stocks can give substantial returns, it is basically a double edged sword and can also result in big losses if things move the other way.
Best Momentum stocks currently in ASX are
Lotus Resources Limited (ASX: LOT)
Lotus remains focused on commercialising and restarting operations at the Kayelekera Uranium Project, with the mine restart expected to be finalised by late 2025. This forthcoming restart of the Kayelekera mine presents a compelling and viable commercial opportunity for the company, with the potential for significant production rates. This is underpinned by a robust resource base, currently estimated at 51.1 million pounds of U3O8, coupled with a solid historical production record
This initiative underscores a medium-term expansion opportunity for the company's operations, positioning Lotus for potential growth in the coming years. Furthermore, the anticipated restart of operations at Kayelekera coincides with improving uranium market conditions. There is a strong long-term outlook for the uranium market, driven by increasing global adoption and positive sentiment towards the nuclear sector. As the world seeks cleaner energy sources to address environmental concerns, nuclear power is gaining traction as a reliable and low-carbon option. This trend is expected to support the growing demand for uranium, further enhancing the prospects for Lotus in the clean energy sector.
Catalyst Metals Limited (ASX: CYL)
Catalyst Metals Limited (ASX: CYL) has achieved significant growth in its financial performance during the first half of FY24, marked by tripled revenues and increased cash flows from operations.
This notable advancement is a direct result of the impactful acquisitions and expansion initiatives implemented in FY23, indicating a substantial enhancement in potential returns for the full fiscal year.
Catalyst continues to advance highly promising projects within its pipeline, distinguishing itself through a combination of accomplished growth and existing revenue generation, alongside substantial prospects for future expansion and financial growth.
ASX Momentum Strategy is best illustrated in the below given momentum stock, where Veye’s nimble footed analysts gave a perfect buy and sell recommendation, ultimately deriving very good profits.
Neometals Ltd (ASX: NMT)
(Chart source: TradingView)
Upon seeing the upward momentum, Veye Research had recommended "Buy" on “Neometals Ltd” at the price of $0.405 on 16 March 2021. When the momentum started weakening, Veye recommended a “Sell” on “Neometals limited” at the closing price of $1.570 on 27 April 2022. It more than tripled and gave excellent returns of more than 287% in less than fourteen months during this period.
This stock is now at $0.10, well justifying the use of this strategy.
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