We see potential in a cybersecurity company
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U.S. stock markets have just experienced a significant rally, and signs of momentum exhaustion have already emerged—meaning the upward momentum may be losing steam—but many stocks are only now beginning to join the rally. Energy and technology stocks continue to perform well. This week, we took a closer look at the stocks of Skyworks Solutions, a semiconductor manufacturer, and Palo Alto, a world-leading cybersecurity technology company.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Skyworks Solutions (daily): Over the longer term, the share price recently hit a higher low above the 50 level. The recent uptrend signals a structural shift from the last downtrend, which is a positive sign and could pave the way for another long-term rally. The stock may face stronger resistance in the 81.25–87.5 range.
Palo Alto Networks (daily): The downward trend structure—marked by a series of lower highs and lower lows—had already shifted several weeks ago. The recent upturn is encouraging and may signal the start of a sustained upward trend. The thick green trendline represents the risk management level. Based on the reversal pattern, the area around the previous breakout level (206.25) may also be reached.
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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