Riding the wave: 6 ASX companies showing momentum

Just like a surfer waiting for the perfect swell, nothing beats hitting “Buy” and watching your investment take off. 

That's the essence of momentum investing: finding a rising wave and riding it until it fades. This strategy isn’t about chasing "value" or "growth" labels; it's about one thing - price. What matters is that a stock is moving up and staying up.

In this wire, we've hunted for momentum across large, mid, and small-cap stocks using a simple screen based on five key signals.

Our Screen

We identify momentum stocks using a simple, five-part screen:

1. Positive six-month price change: The stock price must have increased over the past six months.
2. Outperforming the ASX 200/Small Ords: The stock must have have outperformed the index in the prior six months. Otherwise, you may as well stick to ETFs!
3. Above the 50-day moving average: This ensures the short-term upward trend is still in place.
4. Not overbought: The Relative Strength Indicator (RSI) must not be above 70, a level that indicates a stock is overbought.
5. Bullish Trading Central view: The stock must have a "bullish" or "rising prices" rating from this independent research provider.

Note: RSI, like other technical indicators, is one signal among many. 'Overbought' (above 70) or 'oversold' (below 30) reflects strong momentum, not an automatic sell or buy. A move above the 70 level - then back below - can flag that momentum is fading. Importantly, some traders believe RSI is best used is sideways markets, not trending markets, but we treat the indicator as context alongside price, moving averages, and relative performance.

If a company passes all five tests, it shows clear momentum: its price is rising, it's beating the overall market, it has technical support, and an independent firm has a positive outlook.

We know technicals aren’t everything, so we’ve also added some qualitative notes and recent fundie commentary on these companies where available.

#1. Large Cap - Charter Hall Group (ASX: CHC)

Charter Hall Group is a leading diversified property investment and funds management company with nearly $85 billion in funds under management (FUM). It's a commercial landlord with 1,600 properties, including iconic buildings like No. 1 Martin Place in Sydney.

The stock is the top large-cap in our screen, exhibiting strong momentum and outperforming the ASX by nearly 30%. 

With an RSI of 57, it remains in the neutral zone, well below the overbought threshold of 70. Trading Central sees momentum remaining bullish with key resistance at $21.80. A break above this level could push the stock toward targets of $24.20 and $25.70, while a break below may see it move down to $20.95 and then $19.75.

Qualitative note: Charter Hall is a beneficiary of growing land and property values, as well as the rising demand for office spaces and potential interest rate cuts.

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#2. Large Cap - JB Hi-Fi (ASX: JBH)

JB Hi-Fi is Australia's largest home entertainment retailer, with over 300 stores. The stock has posted an impressive long-term performance and has outperformed the ASX by over 25% within our six-month analysis window. 

Its RSI of 51 is within the neutral zone, indicating it’s not overbought.

Trading Central identifies an important pivot point at $110.92. As long as it holds above this level, the next price target is $123.63. If it breaks below, the stock may slide to $106.86 and then $104.45.

Qualitative note: JBH has been a strong beneficiary of consumer demand for electronics, rising incomes, and a growing Australian population.

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#3. Mid Cap - Catapult Sports (ASX: CAT)

Catapult is a global sports data and analytics company used by more than 4,600 teams in over 40 sports and 100 countries. Its solutions provide real-time data to help optimize athlete performance and reduce injuries.

The company’s share price has soared more than 93% in the past six months, while the ASX 200 returned 13.41%. Still, the technical fundamentals remain supportive, though the RSI of 65 is approaching overbought levels. 

Trading Central sees the medium-term upside prevailing as long as the stock holds 6.33 as support. An alternative scenario would be a drop below this level, which could lead to prices of 5.90 and 5.65.

Qualitative note: Catapult delivered strong results in the latest earnings season, reporting 19% revenue growth and an all-time high EBITDA margin of 31%.

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#4. Mid Cap - Lovisa Holdings (ASX: LOV)

Established in Sydney in 2010, Lovisa has exploded into the fashion accessories scene, with over 1,000 stores across more than 50 countries. The company has outperformed the ASX 200 by nearly 50%, and its RSI is at 53.

According to Trading Central, as long as the stock holds at $37.17, it may have the momentum to rally to $42.74. If it breaks this level, it could slide to $35.78 and then $34.96.

Qualitative note: In August, the company reported strong results and noted that the new fiscal year was off to a strong start, with comparable sales up more than 5%.

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#5. Small Cap - Motorcycle Holdings (ASX: MTO)

Motorcycle Holdings is a leading retailer and wholesale distributor of motorcycles, parts, and accessories with 55 operations across Australia and New Zealand.

For small-cap stocks, we'll compare performance to the Small Ordinaries Index. The index's 22% gain over the past six months was trounced by Motorcycle Holdings' 111% surge. 

The company’s RSI is in the neutral sweet spot of 50. While the stock is currently under pressure, the medium-term trend still looks supportive. Trading Central sees the next targets at $3.89 and $4.01 if the stock climbs back above $3.70. However, if it breaks below $3.39, it may fall to $2.96.

Qualitative note: Motorcycle Holdings delivered record results in FY25, achieving sales revenue of $650 million and strong after-tax profit growth of 27.7%.

#6. Small Cap - Cedar Woods Properties (ASX: CWP)

Established in 1987, Cedar Woods has grown to become a leading property company with a portfolio diversified by geography, price point, and product type. The stock has crushed the Small Ordinaries by nearly 37% in the past six months, and its RSI is at 14.

Technicals look supportive for Cedar Woods, with Trading Central eyeing $7.30 as a key support level. If it holds, the stock could rally to $7.89 and then beyond $8. If it falls, look for $7.09 and then $6.97.

Qualitative note: Cedar Woods is a primary beneficiary of surging housing demand. The company reported a net profit after tax (NPAT) of $48.1 million for FY25, up 18.9% on the prior year.

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Final Words

Remember, technical analysis is not foolproof. Among the hundreds of indicators available, we've used just the most popular ones to find stocks that are rising right now.

But just like in the ocean, a wave can change very quickly. If you're using momentum trading, it's important to stay on top of your portfolio and manage risks with tools like stop and limit orders.

We hope you enjoyed this content, which focused on technicals to show which stocks are exhibiting strong momentum. If you'd like to see more content and different indicators, please let us know in the comments below.