Bank of America Corp.'s trading desk is advising clients to invest in US momentum stocks. This recommendation comes after a period of profit-taking, which the desk believes has brought these stocks to an appealing price point.

The strategists, led by Savita Subramanian, see a potential for the momentum factor to outperform, especially in the short term. They are particularly bullish on stocks that have shown strong recent performance and expect these to continue their upward trajectory.

BofA's analysis suggests that while growth stocks have faced headwinds, the underlying performance of many momentum names remains robust. They anticipate a 5% uplift for this segment, driven by a combination of technical factors and a potential rotation back into these favored names.

Clients are being encouraged to re-evaluate their portfolios to include a greater allocation to momentum strategies, with the expectation of capturing gains as the market potentially re-embraces these high-flying equities. The firm highlights that this could be a tactical opportunity for quick returns.