Defensive sectors are strengthening, but attractive stocks are scarce
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Gen Digital: another strong earnings report
Gen Digital once again delivered better-than-expected quarterly results, while management also struck a more optimistic tone regarding the outlook. The company raised its FY2027 profit guidance above analyst expectations. Investors were also encouraged by comments from the CEO indicating that there are currently no plans for any major acquisitions, following earlier speculation about a potential takeover of GoDaddy, which many viewed as a sizeable and potentially risky deal. After being heavily sold off in recent months on these rumors, the stock reacted positively. Technically, the share price has once again reached the upper end of its multi-year trading range, which could act as a significant resistance level. However, given the improving fundamentals, we are raising our multiples based previous target price from $32 to $35 per share. Gen Digital shares remain on our Equity Top pick List.
The Fertilizer Producer’s Chart May Be Showing Promise Again After a Long Time
Despite the sharp decline, a number of previously underperforming, lagging stocks are showing signs of life. At the same time, for these stocks, we have seen almost without exception only initial, concentrated buying reactions over the past few months. However, a sustained turnaround would require the formation of higher lows and the confirmation of clear reversal patterns. In light of this, it is worth monitoring the stocks listed in the first table on a daily basis, as additional positive trading days accompanied by rising volume could significantly increase the likelihood of an emerging uptrend. We’ve selected two companies from the long list. One is Take-Two Interactive Software, which, moreover, is set to release its quarterly earnings today after the market closes, while Grand Theft Auto VI—eagerly anticipated by investors and gamers alike—is scheduled for release in ten days. The other stock we’re highlighting is Mosaic Company, one of the world’s largest fertilizer manufacturers, which is also showing an increasing number of positive technical signals following a significant drop in its stock price.
Among stocks listed on the US stock exchange, capital continues to flow into defensive segments: utility and energy stocks are performing particularly well. Nevertheless, there are few truly attractive stocks left on the market, as many stocks have already risen significantly. At the same time, there are still a few companies that have room to catch up.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Oxydental Petroleum (daily): It broke out upwards two days ago, activating a one-turn pattern with a neckline of 50. Since it left a gap behind, the risk management level can be set to fill this gap, i.e., closing below 47. The short-term target is around 62.5, but in the longer term, 75 is also possible.
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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