The energy sector remains the winner
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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.
We have seen significant declines in the markets; the downturn is practically universal, so the model yields almost no results in such situations, as most stocks are trending downward and momentum is pointing toward further declines. Nevertheless, there are always winners; due to the crisis, the energy sector continues to perform well, with Norwegian and British companies at the top of the list, though unfortunately these have already seen significant gains. Among the others, Verbund AG has made its presence felt; it is a major energy company majority-owned by the Austrian government, serving as Austria’s leading electricity provider and one of Europe’s largest hydroelectric power generators, producing electricity almost entirely from renewable energy sources.
Best rated European stocks based on momentum ranking
Compelling technical picture
Verbund (daily): Before breaking the downtrend, the chart left a gap behind, which is a very good sign since it hasn’t been filled. We’re seeing upward days accompanied by strong volume, which could lead to a minor retest. The area around 62.5 should hold the decline; otherwise, the reversal could fizzle out. For this to happen, however, the price would need to close below 59.4, which could thus serve as the initial stop level. Consequently, a long position can be opened with low risk around the 62.5 level. The target price could be 81.25, above which a gap may halt the upward movement.
List of stocks with a chance of a turnaround in the coming weeks
The model did not return any results.
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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