U.S. markets remain stretched, so the number of momentum-based trading opportunities has declined significantly. As a result, it is becoming increasingly difficult to find high-quality stocks poised for an uptrend. Today’s analysis once again features Mosaic, one of the world’s largest fertilizer manufacturers, and Ford Motor Company. We recommended Mosaic stock two weeks ago, but at that time we made the buy recommendation contingent on certain conditions being met. Those conditions have since been met, so it’s worth keeping a close eye on the stock and looking for entry opportunities. In the case of Ford, further confirmation is needed; however, the current risk-reward ratio appears favorable, so this stock may also be added to the list of long-term investment opportunities.
European markets are also trading near key resistance levels, in the shadow of previous highs, so it’s no surprise that momentum strategies are currently underperforming. It’s hard to find a stock that shows a convincing reversal signal and thus offers an attractive long opportunity. In today’s analysis, we examine the chart of Austria’s largest electricity provider and one of Europe’s leading hydropower companies. The stock belongs to the category of defensive, low-volatility companies that pay stable dividends. Normally, we would look for a clearer technical picture and a stronger long setup, but in the current market environment, high-quality reversal opportunities are so scarce that, out of the four stocks we examined, this one proved to be the most promising.
After reaching the 150,000-point level, the index began to correct. However, for a meaningful short position to develop, the long-term uptrend line would also need to be broken. MOL’s share price rose steadily to the 5,000 forint level, where it had become significantly overbought, triggering a correction. Richter climbed back toward its previous all-time high before turning downward from there. Magyar Telekom’s share price showed a slight rise from the 2,500 forint level; however, if it were to remain below 2,656 forint for an extended period, this could signal a strong reversal. Opus continues to move within a downtrend, and there are no clear signs of a reversal forming at this time. Following a sharp rise, Rába is currently in a consolidation phase. It is worth looking for new long entry opportunities after a deeper retest, particularly in the range below 3,125 forints.
The correction has continued in recent days, with the index holding above the natural support level of 146,875. The curve has given a signal to close long positions, but a signal to open short positions may still be ahead of us. A break below the thin green trendline could trigger a more significant correction, which would soon reach 143,750. On the buy side, it is advisable to wait and see.
Resistance levels: 150,000; 156,250.
Support levels: 140,625; 137,500; 134,375; 131,250.
In the range above 5,000, overbought conditions triggered profit-taking. A break below the dotted trendline could open the door to further declines. Strong support lies around the previous high of 4,375. The uptrend line is far away, so any correction could be significant.
Resistance levels: 5166; 5,313.
Support levels: 4,375; 4,062; 3,750; 3,438.
Heavy selling above the natural support level of 13,438 halted the stock’s advance and pushed it into a correction. This level was also the previous high, so the rebound confirmed it as a resistance level. The first support level is at 12,500; the stock could still remain within the uptrend, and even a more significant retest down to around 12,180 should be enough to halt the decline.
Resistance levels: 13,750; 14,375; 15,000.
Support levels: 12,500; 12,180; 11,875; 11,250; 10,940; 10,625.
After the correction, the price found support at the 2,500 level, from which a minor rally began, though its momentum is quite weak. Nevertheless, if it were to rebound to around 2,656 and fail to close above that level, it would signal weakness and, combined with a lower high, could point to a downward trend.
Resistance levels: 2,656; 2,734; 2,813.
Support levels: 2,500; 2,375; 2,250.
The downtrend is the dominant factor. Until the price closes above the red trendline again, it’s not a good idea to go long. Stronger support is found around the 281 level. A dip could mark an important low, but until we see a strong up day with significant volume, going long doesn’t seem like a good idea.
Resistance levels: 375; 406; 438.
Support levels: 281; 250.
Given the narrowing consolidation following the significant rally, the long wave does not yet appear to be over. A further rise is more likely. On the downside, strong support can be found starting from the 2,500 range, so looking for long positions again in the zone below 3,125 may be advisable. The red trendline, however, is still far away; a prolonged consolidation would be needed to create a favorable long situation again.
Resistance levels: 2,500; 3,125; 3,750.
Support levels: 1,875; 1,563; 1,250.
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