We see opportunities in the industrial and financial sectors
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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.
The companies identified—based on our screening criteria—as having upward potential primarily come from the financial, industrial, and technology sectors. Overall, however, the market environment remains highly volatile. Currently, it is more likely that stock markets will move within a broader, sideways range, with the possibility of reaching new highs. In this situation, a momentum-based approach may offer more favorable trading opportunities: selling at overbought levels and buying in oversold ranges may be advisable.
Best rated US stocks based on momentum ranking
Compelling technical picture:
AMD (daily): The longer-term chart looks promising, as the stock bounced off the key natural support level of $187.50 two weeks ago, leaving a gap open. In recent days, it broke through the upward correction within the uptrend, signaling a long position. The upside is now more open; the previous high of $265 could be easily reached, but it could go even higher.
Morgan Stanley (daily): The stock has broken out of its corrective downtrend in recent days, opening the door to an uptrend. It has also left a gap behind, which is a very good sign and suggests there may still be room for further gains. The 175 level could offer a good entry point for a long position, while the target price could be around 200 at a minimum. We could see it go even higher, so the potential return relative to the risks makes this long opportunity look even more attractive. The bank will release its quarterly report on Wednesday, which could cause a significant shift in the price.
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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