Velocity is a specialised stock selection product designed to identify high-momentum opportunities—commonly referred to as "velocity stocks"—which experience rapid and sustained price increases over relatively short timeframes. These stocks often attract traders and active investors due to their potential for significant short-term gains. However, such opportunities come with elevated volatility and risk, which is why Velocity applies a structured, data-driven approach to stock selection.
Various strategies to pick velocity stocks:
Momentum
This strategy focuses on identifying stocks that are moving strongly in the direction of the broader market or their sector peers. It aims to capitalise on continued price strength by riding prevailing trends. Momentum-based selections use a combination of technical indicators and sentiment data to filter stocks demonstrating consistent upward movement and strong relative performance.
Mean Reversion and Retracement
This approach is based on the concept that stock prices often revert to their historical average after moving too far in either direction. It targets stocks that have pulled back or spiked significantly and are showing signs of returning to their mean. Technical signals such as RSI, Bollinger Bands, and key support/resistance levels help identify potential entry points for a reversal or consolidation.
Earnings Breakouts
Stocks that deliver better-than-expected earnings often experience sharp price movements immediately after results are announced. This strategy focuses on identifying those breakouts driven by earnings surprises. It blends fundamental screening with technical breakout signals to capture post-earnings momentum and volume-driven moves.
Event-Based Strategy
Certain corporate events—such as M&A announcements, board changes, divestitures, or capital raisings—can act as significant price catalysts. This strategy looks to capture movements triggered by such events by monitoring news flow and identifying stocks with a history of reacting strongly to similar triggers.
News-Based Strategy
Markets are highly sensitive to external events like central bank announcements, geopolitical developments, and economic policy shifts. This strategy tracks macro and sector-specific news that can quickly alter investor sentiment and pricing. Stocks are assessed based on how they’ve historically reacted to similar news-driven scenarios.
What sets Velocity apart is its holistic approach. Rather than relying on a single method, it blends technical analysis, short-term event tracking, market sentiment, and expectation analysis to form a multi-dimensional view of each opportunity. This integration of diverse analytical perspectives enables investors to make more informed decisions and navigate volatile trading environments with greater precision.