In recent years, artificial intelligence has become one of the most important topics in the technology sector. While much of the attention is focused on model developers and companies providing infrastructure, the long-term winners in this technology may also emerge on the application side. The interactive media segment is particularly interesting from this perspective, as the business models of companies operating in this field rely heavily on monetizing user attention and producing digital content. In the second part of our industry analysis series, we review current trends and potential catalysts affecting search engines and social media platforms.
European stock markets are currently outperforming their U.S. counterparts, and thanks to the gains of the past few days, our screenings have identified a number of interesting stocks. Among these, we have highlighted stocks that have recently shown signs of a structural turnaround, while strengthening buying pressure is also supporting the positive technical picture. One such company is Germany’s Nemetschek, a leading provider of construction and architectural design software. The other is the Dutch firm Wolters Kluwer, which offers professional information, software, and specialized database solutions. For both stocks, the search for long entry opportunities may have begun.
Significant changes are being observed in U.S. stock indices. Both the magnitude and the pace of the declines suggest that the correction phase could become more prolonged. Following the release of better-than-expected labor market data last Friday, it is likely that the high-interest-rate environment will persist for longer than previously anticipated. However, we cannot yet speak of a sustained trend reversal: this would require a clear break in the upward trends, the formation of lower highs, and the emergence of classic reversal patterns. These confirmations are still lacking for now, though the likelihood of this has increased significantly in the current market environment. An important sign regarding European indices is that they have failed to rise to new all-time highs, which makes them more vulnerable from a technical perspective and could facilitate the onset of a downtrend. The emerging markets index has also undergone a significant correction, where even the formation of a rare island reversal pattern cannot be ruled out. If this pattern is not negated by a rapid rebound, it could place the index under sustained downward pressure.
The wave of selling that has begun in recent days could lead to a more sustained reversal pattern. A minor upward wave—and a lower high—should follow shortly. There is a very important level at 7,031; this is a natural level near the top of the previous upward wave. The dynamics of the decline may have provided a strong signal that the market may have peaked for weeks.
Resistance levels: 7,656; 7,813.
Support levels: 6,875; 6,563; 6,250; 5,937; 5,781; 5,625.
The upward crawl gave way to a wave of profit-taking by the end of last week. The fading prospects for interest rate cuts, driven by favorable labor market data, triggered a strong profit-taking reaction. Stronger support is found around 26,562, at the previous peak. Given the dynamics of the decline, a lower peak would likely be expected in the event of a rally. A break in the uptrend has not yet occurred, but this could happen within a few days.
Resistance levels: 29,688; 30,469; 31,250.
Support levels: 26,562; 26,172; 25,781; 25,000..
The uptrend broke down here as well on Friday. A correction phase may be on the horizon, although this index has been a significant underperformer compared to its larger counterparts so far. A break below the 2,813 level would open the way toward the lowest upward gap (2,578). The 2,891 level should now act as strong resistance.
Resistance levels: 2,891; 2,968; 3,125.
Support levels: 2.813; 2,734; 2,656; 2,578; 2,500.
Last Wednesday, the price fell through a gap that wasn’t filled within two days, so this could be considered a strong sell signal. As long as this gap remains open, the price may remain under pressure. 25,000 is now resistance; a close above this level would be the only thing to change the short-term selling structure. On the downside, 22,656 and 21,875 are strong support levels, and the index could even drop to these levels.
Resistance levels: 25,000; 25,781.
Support levels: 22,656; 21,875; 21,093; 20,313.
The uptrend is still intact, but the sideways movement around 625 increases the likelihood of another decline. The trend would break at the 609.4 level, opening the way for a decline. The first support level, around 586, would be tested.
Resistance levels: 625; 640.6; 656.3.
Support levels: 594; 562; 531; 515.6; 500; 484.
Seeing a strong island reversal is a rare signal; it means that a gap has remained open at similar price levels on both the upside and the downside. Stuck positions in the band above it may keep the price under pressure, so it may be worth staying on the buy side for a longer period. A stronger support level lies around 56.25, which may also be tested.
Resistance levels: 68.75; 71.88.
Support levels: 56.25; 50; 48.43; 46.9.
OTP Global Markets offers a broad range of services in the field of local and international money and capital markets.
Read morePersonal care and expertise with OTP Private Banking, along with the knowledge, security, and innovations of a multinational banking group.
Read more
