Gen Digital's stock may turn around
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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.
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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