The energy sector remains the winner
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US bank shares fell
The third-quarter earnings season in the US has picked up pace following the release of the latest figures from US banks. Based on preliminary expectations, the third quarter is likely to have closed with strong earnings growth for S&P 500 companies, led by the energy and technology sectors. The major US banks have still achieved solid growth on an annual basis, indicating that their operations remain strong, but the pace has clearly slowed in many cases, which has tended to result in negative share price reactions.
Commodities - Technical Analysis
Gold and silver continued their downward trend, bouncing off key levels. Until their downward trends are broken, they will not be able to produce a significant rise. The fall in oil prices reversed from the $87.5 level and began a slight upward movement. Natural gas remained in an uptrend; a significant rise could even occur if it breaks out upwards. The price of copper has become stuck in a wider range, so the oversold and overbought zones may offer more favourable trading opportunities. The falling prices of wheat and corn have reached key support levels; a buying reaction from these levels could present favourable long opportunities with limited risk.
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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