The Austrian energy giant is starting to look promising
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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.
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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