The Austrian energy giant is starting to look promising
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Broadcom: The long-term story is still intact, but the quarterly results failed to impress the market
Broadcom, one of the leading players in the market for custom-designed AI chips, released its quarterly results on last Wednesday. The company’s figures were mostly in line with or slightly exceeded expectations, while its forecast for the current quarter proved to be rather conservative, reaching only the lower end of the consensus range. However, the lack of positive surprises was partially offset by the chipmaker’s longer-term outlook, which projects a further uptick in demand for AI and anticipates that revenue from the AI chip business will double by 2027 and 2028. The strong long-term growth outlook continues to support the company’s favorable fundamentals, so we are maintaining the stock on our Equity Top Pick List.
Palo Alto's results reinforce the “AI winner” narrative
Palo Alto Networks, a leading player in the cybersecurity market, released its quarterly results last Tuesday after the market closed, reporting strong AI-driven demand, similar to that of its competitors. The figures for the quarter just ended exceeded analysts’ estimates, while the forecast for fiscal year 2027 also surpassed expectations in terms of key financial metrics. This strong momentum is likely to continue in the coming quarters, as the spread of AI-enabled cyberattacks and the increasingly widespread use of AI agents are driving up demand for security services. We therefore continue to view the fundamental outlook for this stock — which is also included on our Equity Top Pick List — as strong, and we are raising our fair value estimate from $330 to $400.
European markets are also trading near key resistance levels, in the shadow of previous highs, so it’s no surprise that momentum strategies are currently underperforming. It’s hard to find a stock that shows a convincing reversal signal and thus offers an attractive long opportunity. In today’s analysis, we examine the chart of Austria’s largest electricity provider and one of Europe’s leading hydropower companies. The stock belongs to the category of defensive, low-volatility companies that pay stable dividends. Normally, we would look for a clearer technical picture and a stronger long setup, but in the current market environment, high-quality reversal opportunities are so scarce that, out of the four stocks we examined, this one proved to be the most promising.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Verbund (daily): Looking at the technical chart for this stock, it’s fair to say that there’s now a realistic chance of an uptrend, as it has broken its downtrend and formed a higher low. Unfortunately, the upside potential isn’t great; significant resistance looms around the natural level of 68.75. 62.5 is also a resistance level, so it may be better to buy primarily during a retest.
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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