Honeywell's stock price may be on the verge of a breakout
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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.
Major indices began to fall at the end of last week, but the movements were news-driven, and there has been significant volatility, which has resulted in a low number of opportunities indicating a quality breakout for the past two weeks. This week, one of the stocks from our Equity Top Pick List, Honeywell, also ranked high on the momentum list. After a minor pullback, the technical picture could indeed be supportive.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Honeywell (daily): The chart indicates a potential long opportunity, but it is only worth opening a position if specific technical conditions are met. Honeywell, which is on our Equity Top Pick List, has been trading within a consolidation channel for some time and is currently attempting to break out of it to the upside. The $250 level represents an important technical resistance. The most recent upward wave showed the greatest relative strength: the stock has just experienced a day of heavy buying volume with several sharp rallies, indicating favorable long-term buying interest. Based on this, an attractive long entry opportunity may emerge following a retest. It is worth looking for a buying opportunity primarily after the price retests the level around $234. If the price successfully breaks through the $250 resistance level, a target price of around $281 appears at least achievable from a technical perspective.
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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