The stock market affords opportunities for investors with any time horizon.

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Stock traders can work within short-, medium- or long-term timeframes, and different stocks can be better suited to investors with different timeframes. If you are a short-term trader, knowing how to spot the best stocks to buy for the short term is essential to generating the kind of quick profits that you seek in the market. Although the specific stocks that are best for short-term trades are constantly changing, there are certain fundamental and technical characteristics that can help you to identify the best short-term picks at any given time. Building a strategy around these factors can increase your chances of success with a short-term trading strategy.

Revenue and Profitability Trends

Look for companies whose quarterly revenue and profit growth significantly exceeds their major competitors and industry averages. Analyze the rates of growth rather than the absolute value of growth in these areas. For example, if a company’s revenue increased from $1.5 billion to $1.7 billion in one quarter, the increase of $200 million would represent about a 13 percent growth rate. Compare that to a company whose revenue rose from $2 million to $3 million. The significantly lower increase of $1 million dollars in the second example equates to a 50 percent growth rate. Stocks with higher growth rates are more likely to experience dramatic price gains in short periods of time, creating valuable short-term trading opportunities.

Companies Paying No Dividends

High Price Volatility

On the technical analysis side, look for stocks with high price volatility — those whose prices swing widely up and down rather than remaining relatively constant with only steady growth. Higher price volatility can introduce greater risk for traders, but it can also present the most profitable short-term trading opportunities. By timing your trades at the right moment, you can ride a wave of upward price movement and sell your position just before the price swings back down. High volatility stocks can be especially profitable for day traders, as they may present several short-term opportunities each day.

Trend Alignment

Look for stocks whose price is in a strong trend in multiple timeframes. If a stock is in a clear uptrend on a five-minute, one-hour and daily chart, for example, it is much more likely to continue upward in the short term. Trend alignment in multiple timeframes means that investors with different timeframe goals are all thinking in the same direction. This increases the chance of self-fulfilling expectations of price movement over the short term materializing in the market.

Timing Trades Around Earnings Reports