Software companies have woken up
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Several sectors are showing signs of a turnaround
As the technology sector—which had been the market leader until now—began to correct, other sectors are already picking up the baton. In recent days, real estate, healthcare, and financial companies have outperformed or at least remained stable, suggesting that a turnaround may be underway for some previously underperforming stocks. Signs of a turnaround are visible, for example, in Mid-America Apartment Communities, which owns and operates residential properties, and Aon, which operates in the fields of risk management, insurance brokerage, and human resources solutions.
All eyes on the SpaceX IPO
SpaceX’s IPO has entered the home stretch, in what promises to be one of the year’s biggest market events. The company has set a fixed share price of USD 135 and is preparing to raise USD 75 billion. The initially low free float, the unusual lock-up structure and the prominent role of retail investors could together create a situation in which extreme volatility may occur in the first few trading days.
U.S. indices hit new highs, maintaining their upward trends. Software companies are now beginning to catch up with the semiconductor sector, which has been leading the way so far, so we took a closer look at Palantir and Microsoft among the results.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Palantir (daily):The stock broke out upward from a long correction phase with a gap. This pattern could potentially reach last year’s year-end high. It’s advisable to manage risk by monitoring a break of the thick green trendline. If it retests that level, that could be the best opportunity to enter a long position. The target price is around 200 at a minimum, but it could go even higher.
Microsoft (daily): This stock has also broken out of a prolonged correction phase, opening the door to an upward move. The thick green trendline could serve as a risk management level. Initially, 406 could be the stop level. The target price could be around $500 at a minimum.
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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