A sharp turnaround in the healthcare sector
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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.
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.
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