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Best Short Term Stocks To Buy Now (Top Momentum Stocks May 2025)

A list of the best momentum stocks to buy for short-term gains, based on the proven Zen Ratings quant model. "A" Rated stocks averaged +32.52% return. Learn More

It’s not hard to see the appeal of short-term momentum stocks. They offer investors and traders the potential for quick — yet substantial — gains. 

These stocks often experience rapid price increases due to earnings surprises, sector trends, or investor hype. Short-term momentum trading seeks to capitalize on these movements, riding upward trends for quick gains.

However, it’s crucial to remember that just because a stock is surging doesn’t mean it’s a smart investment. Momentum can fade quickly, leading to sharp reversals.

In this article, you will learn:

• Why momentum stocks can be profitable — but risky
• What’s the best momentum signal to ensure future returns … And how do the fundamentals of the underlying business play into it?
• How to locate the best momentum stocks for your investment portfolio

Before we dive into how to find the best short-term stocks to buy now, let’s start by covering a few basics.

A short-term momentum stock is a stock experiencing a rapid price increase over a short period — this might be days, weeks, or even a few months. The increase is typically driven by earnings beats or favorable earnings estimate revisions, a hot sector, technical breakouts, or increased investor interest following a news catalyst.

These stocks gain traction as traders and algorithms pile in, which can push prices higher based on the increased activity and performance rather than long-term fundamentals. 

Unlike long-term growth stocks, which rely on steady revenue and earnings expansion from the underlying company, momentum stocks thrive on short-term price trends. Investors aim to ride the wave for quick profits. However, momentum can fade just as quickly as it builds. This makes timing crucial — once buying pressure weakens, sharp and fast reversals can happen. 

A stock with momentum based on fundamentals, on the other hand, might maintain its upward trajectory over several months or even years, often backed by fundamental momentum signals such as sustained revenue growth, industry leadership, or innovative products. 

Even a good momentum stock can experience short-term pullbacks. However, if their fundamental momentum itself is based on things like consistent earnings growth, expanding market share, and positive investor sentiment, they can continue trending upward for the long haul. Unlike short-term momentum plays, long-term momentum stocks can be part of a buy-and-hold strategy, benefiting from both technical strength and strong fundamentals.

Many short-term investors consider technical indicators the best way to locate the best short-term stocks to buy. Here are some of the specific indicators they look at: 

1. Relative Strength Index (RSI): RSI measures the speed and magnitude of recent price changes to determine if a stock is overbought or oversold. A common rule of thumb is that above 70 suggests the stock may be overbought, while below 30 indicates it may be oversold. 
2. Moving Average Convergence Divergence (MACD): Tracks the relationship between two moving averages (typically the 12-day and 26-day EMAs) to identify trend direction and momentum shifts. When the MACD line crosses above the signal line, it suggests bullish momentum; when it crosses below, it signals bearish momentum.
3. Rate of Change (ROC): Measures the percentage change in a stock’s price over a specific period, indicating how fast the price is moving and offering insight about the potential for a stock's return. A rising ROC is a momentum signal, while a declining ROC indicates a slowdown or reverse course for the trend.

The problem? These technical metrics don’t tell you the full story. Happily, our Zen Ratings system can help you get a better idea of a stock’s prospects by evaluating several other key momentum signals that consider the underlying business, including: 

• Sub-industry momentum: Evaluates how a stock has performed relative to others within its specific sub-sector.
• Share turnover: Measures how actively a stock is traded, indicating investor interest and liquidity.
• Volume-weighted momentum: Assesses price momentum while factoring in trading volume for a more comprehensive view.
• Risk-adjusted momentum: Incorporates a stock’s risk profile to provide a balanced momentum assessment.
• Price standard deviation: Analyzes the stock’s price volatility over time to gauge consistency and stability.

Short-term momentum stocks can potentially be high-reward, but they’re also high-risk. Here are some important considerations: 

• Sudden Trend Reversals: Momentum stocks can rise quickly, but they can also start to drop just as fast when buying pressure weakens. A shift in sentiment, negative news, or profit-taking can trigger sharp declines, leading to significant losses.
• High Volatility: These stocks experience large price swings, making them unpredictable, which requires risk management. For instance, sudden intraday reversals can trigger stop-losses or cause traders to exit prematurely before the trend resumes.
• Emotional Decision-Making: The fast pace of these price fluctuations can lead to FOMO-fueled decision-making, such as chasing a stock that has already peaked, or panic selling. 

These tips can help mitigate your risk when investing in short-term momentum stocks:

• Know Where to Look: Instead of just following what people are posting about on Twitter, start using a reputable source to locate the best short-term momentum stocks to buy. WallStreetZen’s Short-Term Momentum Stocks To Buy Now screener is a continuously updated list of the best potential investments based on their Zen Rating Component Grade for Momentum, which reviews 22 factors proven to drive continued momentum for stocks.
• Do Your Due Diligence: Often, by the time a short-term momentum stock gets noticed, it may already be overextended. Buying too late into a run-up can increase the risk of buying near the peak. WallStreetZen tools can help you navigate whether or not this is the case. For example, looking at the Forecast page for the stock can help you see if analysts project additional upside. Additionally, the Zen Rating for a stock can give you an overall idea of a stock’s worthiness based on 115 factors. In particular, a stock’s Momentum Grade is worth looking at to see if the momentum could continue. 
• Have a Plan: If you're a momentum investor, you've got to have a trading plan. Plot out your entry, exit, and stop-loss levels before placing a trade to avoid emotional decision-making.  
• Stay Up to Date: Broader market trends and sector strength can influence momentum stocks, so always consider the bigger picture. Negative market sentiment or unexpected news can derail even the strongest momentum plays. When you add potential investments to your WallStreetZen watchlist, you’ll get regular updates on what’s going on with each security, including changes in analyst outlook and more. 

Price momentum can fade, sometimes quickly. So unless you’re interested in following every tick of a stock, you may want to consider seeking out stocks that have more going for them than just momentum.

Zen Ratings can help you gain this type of bigger-picture view. 

If you're a momentum investor, you should seek stocks that display an overall A or B rating while also scoring A or B for Momentum. However, you should also consider other factors that may support momentum, such as Financials, Growth, and Sentiment. 

In addition to reviewing 22 Momentum Factors, it also zeroes in on 93 other Factors that can greatly increase the likelihood of outperforming the market, including 21 Value Factors, 26 Financial Factors, and more. 

Short-term momentum stocks offer exciting opportunities for momentum investors looking to capitalize on fast-moving price trends, but they also come with significant risks. 

Our Best Short Term Stocks To Buy Now screener can help you quickly locate stocks to buy today. But remember, it’s important to be careful with short-term momentum stocks because momentum can fade quickly, leading to sharp reversals. 

If you prefer less volatility, you may prefer to stick with stocks that have longer-term potential, such as those in the Zen Investor portfolio. Momentum is just one of the many factors considered in the rigorous 4-step vetting process that each stock goes through before being added to the portfolio. Gain access to the market-beating Zen Investor portfolio now.