The healthcare sector is performing well
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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.
The markets have experienced significant gains, and for the past two to three weeks, a rotation has been underway from the technology sector—which had been the leader until now—toward other sectors. In recent days, the financial and healthcare sectors, in particular, have performed exceptionally well. Two major multinational companies operating in the healthcare industry met this week’s screening criteria. One is the Danish company Novo Nordisk, which is already on our Equity Top Pick List; the other is the Swiss-based Straumann Holding, one of the global leaders in dental implants, dental prosthetics, and regenerative dentistry.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Novo Nordisk (daily): We’re seeing a short-term reversal on the chart, which still has room to move higher. As for target prices, there are two possibilities. The closer one is at half the size of the large gap left to the downside, while the more distant one could be expected to fill at the smaller gap that was also left to the downside earlier. In the bigger picture, a structural shift would only occur if the curve rose to around 400; at that point, the path upward would be easier, and buying on every dip would be more advisable. The chance of an uptrend would fade below the thick green trendline, meaning it would need to close below 275 initially; later, this level could rise along with the trendline.
Straumann Holding (daily): The Swiss company’s stock price is also showing signs of a turnaround; it has broken out of a long-standing downtrend, and a gap remains open below 100, which could be a favorable risk management opportunity. The decline occurred in two major waves, and with the test of 75, the two-wave correction phase is now complete. As a result, a new uptrend may be beginning; there may still be room for further gains, and in the longer term, the level around 150—which was previously an important resistance level—could be reached.
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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