Tesla could also join the rally
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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.
We found a wide range of stocks joining the rally on U.S. exchanges. The energy sector is still leading the way, but after a significant rally, it’s difficult to find stocks with strong technical patterns. One of the stocks from our Equity Top Pick list began a technical turnaround, so we took a closer look at First Solar’s chart. Another stock that may be on the verge of a turnaround is Tesla. After a long correction phase, its downtrend may be breaking.
Best rated US stocks based on momentum ranking
Compelling technical picture:
First Solar (daily): After a prolonged correction phase, it gave a buy signal at the end of last week. Quarterly earnings no longer influence the curve, so the technical picture appears clear, with a chance of an uptrend to previous breakout levels (the zone between 250 and 265.6 may be reachable). It is advisable to set the initial stop-loss at the 187.5 level.
Tesla (daily): After a prolonged correction phase, it has moved to the top of the momentum list and is showing buying strength. It was a very positive sign that it did not break below the 343.75 level and that a strong upward reaction emerged from there a month ago. This may have laid the groundwork for further long opportunities. A trend-like rise could follow above the thick red trendline. It is advisable to initially set the stop-loss at the 359 level, and then, if a breakout does occur later, raise the stop-loss in line with the established trend.
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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