Pepsi may have a nice surprise for Christmas
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European stock markets are currently outperforming their U.S. counterparts, and thanks to the gains of the past few days, our screenings have identified a number of interesting stocks. Among these, we have highlighted stocks that have recently shown signs of a structural turnaround, while strengthening buying pressure is also supporting the positive technical picture. One such company is Germany’s Nemetschek, a leading provider of construction and architectural design software. The other is the Dutch firm Wolters Kluwer, which offers professional information, software, and specialized database solutions. For both stocks, the search for long entry opportunities may have begun.
We saw significant declines on the US stock markets on Friday, which almost wiped out the list of stocks awaiting a momentum-based turnaround. Despite this, two stocks from the consumer staples sector have broken their trend in recent days and may be poised for an upward trend. One of these stocks is Pepsi, which may be at the end of a strong trend reversal pattern, while the other is Molson Coors Beverage Company, which mainly produces alcoholic beverages.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Pepsi (daily): A long-term downward trend may reverse. The share price may narrow within a trend-reinforcing pattern. Closing above the $150 level with stronger trading volume may indicate an entry opportunity. The target price would be around $175. The thick green upward trend may be the risk management level.
Molson Coors Beverage(daily): The stock price has recently broken an important downward trend. Closing above 46.88 with a small gap could signal a trend reversal. A head-and-shoulders pattern has also formed, pointing to a near-term target of around 50. If the thick green trend line, as the risk management level, does not fall, then it could even go higher, as very strong resistance would only be expected in the 56.25-59.38 zone.
List of stocks with a chance of a turnaround in the coming weeks
Most popular US 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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