UniCredit is on the Move, Here's Why the Trend Could be Sustainable

While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.

The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock alive.

Investors looking to make a profit from stocks that are currently on the move may find our "Recent Price Strength" screen pretty useful. This predefined screen comes handy in spotting stocks that are on an uptrend backed by strength in their fundamentals, and trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.

There are several stocks that passed through the screen and UniCredit S.p.A. Unsponsored ADR UNCRY is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing.

A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. UNCRY is quite a good fit in this regard, gaining 7.9% over this period.

However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 12.3% over the past four weeks ensures that the trend is still in place for the stock of this company.

Moreover, UNCRY is currently trading at 98.5% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.

Looking at the fundamentals, the stock currently carries a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988.

Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.

So, the price trend in UNCRY may not reverse anytime soon.

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