Momentum stocks are the place to be amid unprecedented volatility, Oppenheimer says

The recent surge in volatility has given way to a buying opportunity in one hot area of the market, according to Oppenheimer.

In a new note to clients and in comments Monday on CNBC's "Trading Nation," the firm's head of technical analysis, Ari Wald, said when the times get tough for the markets investors ought to look to momentum stocks, particularly the iShares Momentum ETF, to weather the storm.

Momentum stocks are called such because of high-momentum characteristics like long-term uptrends and consistently high returns.

Oppenheimer has long advocated for buying momentum names, as well as the MTUM exchange-traded fund, which features large- and mid-cap U.S.-listed stocks with "relatively higher price momentum," according to issuer BlackRock.

Wald recommended the same fund to investors two years ago when the market sold off at the beginning of 2016. He generally sees times of market turmoil as occasions to buy the MTUM.

"Historically one of the better performing styles over the last 30 years, we view market weakness as an opportunity to buy the iShares Momentum ETF (MTUM) because we see it as a positive tell that MTUM's relative profile has ticked higher through the ETF's 10 percent pullback," Wald wrote in a note to clients Saturday.

The fund, which has risen 32 percent in the last year, outperforming the broader market more than twofold in the same time, is most heavily weighted by J.P. Morgan, Microsoft, Apple, Boeing and Bank of America, respectively. The basket of stocks, most exposed to technology and financials, rolled over with the broader market in the last week.

Bank of America looks particularly attractive here, Wald said on "Trading Nation," noting the stock is coming off a new high.

Other market participants are less optimistic on momentum as a trade.

The MTUM specifically looks attractive as the market bounces off its recent lows, though not in the long term as the broader market environment has shifted fundamentally, said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management. He cited a broad, fundamental shift in the market environment.

"I think 'buy the dip' has now changed to 'sell the rally.' We're in a regime change, in my opinion, as far as the market goes. Until we take out fresh highs, and are proven otherwise, I believe the much better trade now is to sell the rally. So I'm very cautious about trying to buy momentum," Schlossberg said Monday on "Trading Nation."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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