The technology sector is the winner in Europe as well
Related content
AI Could Be the New Profit Driver for Digital Platforms
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 Software Companies Are Set to Make a Comeback
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.
European markets have not reached new highs in recent weeks because only technology stocks are performing well; in other words, the bull market has not broadened to other sectors. Within the technology sector, software stocks—which had been lagging behind—gained momentum again this week and are beginning to rebound from a prolonged correction. We took a closer look at two stocks: one is SAP, a German multinational software company, and the other is Amadeus IT Group, which develops technology solutions for the travel and tourism industry.
Best rated European stocks based on momentum ranking
Compelling technical picture:
SAP (daily): A break above the 156.25 level could signal a bullish reversal and a buy signal. Looking to buy on every dip could pay off. A close below 156 could signal a failure and a shift in sentiment toward the stock. On the upside, the gap left open earlier below 200 could easily be filled. We can expect stronger resistance at the natural level around 218.75.
Amadeus (daily): We may be on the verge of breaking the downward trend. Buying volume has picked up, and accumulation has been underway for weeks. A close above 53.13 is a positive sign, and there would be room for an uptrend. The short-term targets could be around 65.63 and 68.75.
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.
Get more out of your investments!
Global Markets Services
OTP Global Markets offers a broad range of services in the field of local and international money and capital markets.
Read morePrivate Banking Services
Personal care and expertise with OTP Private Banking, along with the knowledge, security, and innovations of a multinational banking group.
Read more