Utility companies are thriving
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.
This week, only the utilities sector was able to defy the downward market trends. It outperformed other sectors in a way not seen in a long time. This factor may also point to risk aversion on the US stock markets. This week, we highlighted Xcel Energy and PEG stocks among the winners.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Xcel Energy (daily): The stock has been on an upward trend for some time now. The 75 level was an important support, as it did not fall below it but managed to bounce off it in recent days, so it could move permanently from the 50-75 range to the 75-100 range. The target price can therefore be set at around 100. A break in the rising green trend line would be problematic from a long perspective.
Public Service Enterprise Group (daily): After a long period of correction and accumulation, we are seeing strong buying signals. The price rose above 81.25, giving a long signal. Based on the previous pattern, a new peak is definitely possible. If we take the upward trend pattern that started in early 2024 as a basis, the target price could be around 106.25.
List of stocks with a chance of a turnaround in the coming weeks
Not a single paper met the screening criteria this week.
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.
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