Hottest Stocks in CW 22/22

"Fear of missing out" – or in short FOMO – is causing traders to purchase stocks which have already experienced significant price increases. This trading pattern could be observed with Zoom last week. The stocks of the video conferencing service have, however, risen from a very low level. Over the last 18 months, the share price had been steadily increasing following the gains it had made after the Corona crash. The announcement of the unexpectedly positive Q1 figures has led to the current run on the stock and the associated price jump of 21.9 per cent. Top trader, Stefan Waldhauser (stwboerse), identified the stock as worth buying as early as mid-April 2022 and added it to his wikifolio High-Tech Stock Picking. At that time, he commented: "For the High-Tech Stock Picking wikifolio, I like to invest in companies that have fallen out of favour with investors. One such "fallen angel" is Zoom stock, which I have now added to this portfolio after an 80% drop in share price."

The trading pattern ‘buying the dip’ is when traders buy falling stocks in the hope of a bottoming out - i.e. an imminent turnaround. This is what happened last week in the case of the Danish-German vaccine manufacturer Bavarian Nordic. As they produce the world's only approved vaccine against monkeypox, their share price has been fluctuating dramatically recently, rising, or falling in line with the latest news reports on the disease.

The trading pattern of ‘taking profit’ - i.e. selling when the share price is rising - could be observed last week with the shopping centre operator Deutsche Euroshop. Following a takeover bid for Deutsche Euroshop, the share price shot up by almost 40 per cent over the course of the week. Many wikifolio traders took the opportunity and sold their stocks.

Selling when prices are falling is what characterises the ‘jumping ship’ category. This fate struck the German mining company K+S last week. The stocks of the salt and fertiliser producer have been losing value since the end of April after a rally that lasted almost a year. Many wikifolio traders seem to expect further price losses and therefore sold off their stocks last week.

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