Gen Digital's stock may turn around
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International Markets - Technical Analysis
A correction may be underway in U.S. stock markets after several indices reached their target prices last week. For now, this appears to be more of a technical pullback; a more sustained trend reversal would require a clear break in the upward trends. European stock markets underperformed throughout last week and appear notably weak overall, which increases the likelihood of a potential decline. The emerging markets index also broke its steep upward trend on Friday; if it remains stuck at lower levels early this week, the likelihood of a correction could increase significantly.
Significant growth at Expedia
We really can’t complain about Expedia’s first-quarter results; the company beat consensus estimates by a wide margin and delivered strong growth year-over-year across all key metrics. However, due to the war in Iran, travel sentiment appears to be deteriorating, which could already be reflected in second-quarter booking data, and as a result, the company has forecast more modest growth, which has given investors a bit of a scare (hence the drop in the stock price following the report). In the short term, this headwind may persist, but due to strong performance, a significant share buyback program, and the stock’s low valuation, we are maintaining it on our Equity Top Pick List.
Many stocks are starting to catch up with the booming semiconductor sector. During major rallies, a kind of rotation is usually observed, which helps lagging sectors and stocks to rise. A large number of stocks were added to the list this week, and it was necessary to further narrow the selection as the range of promising stocks widened. This trend could continue for weeks; there are no signs yet of a stronger turnaround.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Super Micro Computer (daily): We’ve seen a shift in the long-term downward trend over the past three days. It left a massive gap behind, which is a very good sign, and the trend has broken upward. The low around 50 may be reached, but 62.5 and 75 could also come into play. It’s worth managing risk by covering the gap (below 25).
Gen Digital (daily): A long downtrend has been broken quite sharply. This stock has also left a gap, so a close below 20.3 could be a negative sign. The price could reach a low around 25, but it could also rise as high as the previous breakout level (around 28.12).
List of stocks with a chance of a turnaround in the coming weeks
This week, not a single stock met the screening criteria.
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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