Only the financial sector is showing strength
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European stock markets have failed to reach new highs; in fact, they are significantly underperforming their U.S. counterparts, so there are few truly high-quality reversal signals visible in the market at the moment. Last week, however, one of the stocks from our Equity Top Pick List, Novo Nordisk, signaled the start of an uptrend, which continues to hold. The stock continues to hold a prominent position among the assets worth watching, so it remains advisable to keep it in focus. In addition, we took a closer look at Delivery Hero shares this week, as a favorable long-term situation is beginning to emerge there as well.
Hungarian Equities - Technical Analysis
The index continues to be in a correction phase, which could later lay the groundwork for a long-term upward move, provided the key levels listed below remain intact. MOL: Moving through a correction phase, showing a neutral picture for now; we are awaiting a concrete signal. Richter: It remains a realistic scenario that a rounding bottom pattern has formed with a neckline at 12,500. This could provide an opportunity for a pullback to the 11,875 level. Magyar Telekom: Despite the dividend payment, the stock was already in a correction phase. Opus: A break in the downtrend is imminent; this would “only” require a break above the downtrend line. 4iG: It remains in a downtrend, but the 1,875 level is a key support. No buy signal has been received yet, but if the price stabilizes above this level, the path could open up ahead of a reversal.
This week, several companies in the financial sector have come into focus for investors, and this sector is currently leading the rally. Among these, we have highlighted a stock showing a technically favorable picture: the shares of Talanx, a German multinational insurance and financial services group, which recently broke out and began an upward trend.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Talanx (daily): The downward trend has been broken to the upside in recent days; the price may begin to rise after a prolonged consolidation. The ideal upward trend is indicated by the thick green trend line; the price should remain above this level to attract buyers. 112.5 is now a support level; the price should not fall below this level. The minimum target price is the previous high (125), but a higher level is also possible.
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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