Signs of change at Novo Nordisk
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Our Equity Top Pick List
We have updated our Equity Top Pick List to reflect the events of the past quarter. The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. It can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. Technical analysis should be used to time / determine the specific investment decision.
Could the momentum return in the semiconductors?
The semiconductor sector has had a challenging quarter, with its performance in recent months lagging behind improvements in underlying fundamentals, even as AI-driven demand remained exceptionally strong. The accelerating adoption of AI by enterprises and the proliferation of AI agents are significantly increasing the demand for computing capacity, which points to a further surge in cloud services and data center investments. Given current supply constraints, record-high backlogs, and higher-than-expected investment needs, we expect further upward revisions to earnings forecasts in the semiconductor industry. Nevertheless, the sector’s valuation appears favorable from a historical perspective, which, in our view, could result in a more attractive risk-return profile in the coming months.
An unusually large number of stocks made it onto the watch list this week, so there was plenty to choose from. In the end, we identified two truly outstanding stocks. One is Infineon Technologies, the German multinational semiconductor manufacturer, which broke out of a broad base after a long accumulation phase. The other is Novo Nordisk, a giant in the pharmaceutical industry, which formed a marked reversal pattern after a significant decline.
Best rated European stocks based on momentum ranking
Compelling technical picture
Infineon Technologies (daily): It broke out from a broad base, so 37.5 has now become the initial risk management level. With the help of the accumulation phase, the calculated value could be around 50 at a minimum. It is worth taking advantage of minor declines to buy.
Novo Nordisk (daily): A very strong reversal pattern has been activated thanks to the rise over the last two days. The long downward phase was ended by a head-and-shoulders reversal pattern. This changed the structure of the stock, with buyers taking the initiative. Any retracement can thus be exploited for buying opportunities. The longer-term annual target could be around 625 at a minimum. The stock has also left gaps to the upside, so 312 could be an initial risk management level.
List of stocks with a chance of a turnaround in the coming weeks
Most popular European stocks
The momentum model supports the creation of a technical based stock list that helps to find shorter-term trading opportunities. The model can be used to identify stocks that show reversal signals following more sustained falls/underperformance. We examine one-year, six-month, three-month, one-month and five-day momentum values, which are used to rank the stocks under consideration. The higher a stock is ranked in the order, the better it technically performs relative to the others. The change in the ranking over time is used to determine the life cycle of the stock.
- In the first table, we collect the stocks that show the most attractive picture compared to the others in a given week based on momentum factors, of which those are also presented in a separate chart where a favourable situation can be identified based on additional technical analysis tools.
- In the second table, we list the stocks that are already worthy of being placed in watchlist status. They are not among the best performers, but they have the potential to improve and signal a turnaround in a few days or weeks.
- In the third table, we have also collected the more popular stocks to help identify their position in the momentum order.
The report shows the results of a technical - quantitative based stock screening, which does not examine the fundamental background/value of the companies. For this reason, risk management/position sizing rules should be designed accordingly.
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