A sharp turnaround in the healthcare sector
Related content
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 market has shifted from the rally—which had been driven primarily by the technology sector—into a rotation phase, where liquidity freed up by profit-taking in the previous leaders may flow into the stocks of lagging but still sound companies. This is why the Stoxx 600 index is not falling: the stocks that contributed significantly to the rally are already in their correction phase, while the underperformers have begun to rise. Companies in the healthcare sector continue to perform well, which is why we examined the UK-based Haleon in today’s analysis. The company operates in the global consumer healthcare market; its main products include non-prescription medicines, vitamins, oral care products, and other health and wellness products. Haleon spun off from GSK (GlaxoSmithKline) in 2022 and has since operated as an independent, publicly traded company.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Haleon (daily): The downtrend may have come to an end; we saw a strong buying day last week. A higher low and rising volume indicate that sentiment has shifted. The downtrend structure has also changed, so it’s worth looking for an entry on the long side. The minimum target price is 375, but the 406 area could also come into focus. It’s advisable to manage risk using the thick green trendline.
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