Energy sector dominate European stock markets too
Related content
US bank shares fell
The third-quarter earnings season in the US has picked up pace following the release of the latest figures from US banks. Based on preliminary expectations, the third quarter is likely to have closed with strong earnings growth for S&P 500 companies, led by the energy and technology sectors. The major US banks have still achieved solid growth on an annual basis, indicating that their operations remain strong, but the pace has clearly slowed in many cases, which has tended to result in negative share price reactions.
Commodities - Technical Analysis
Gold and silver continued their downward trend, bouncing off key levels. Until their downward trends are broken, they will not be able to produce a significant rise. The fall in oil prices reversed from the $87.5 level and began a slight upward movement. Natural gas remained in an uptrend; a significant rise could even occur if it breaks out upwards. The price of copper has become stuck in a wider range, so the oversold and overbought zones may offer more favourable trading opportunities. The falling prices of wheat and corn have reached key support levels; a buying reaction from these levels could present favourable long opportunities with limited risk.
The energy sector once again performed exceptionally well on European stock exchanges this week, continuing its weeks-long run as one of the leading sectors. Companies producing basic consumer goods also performed well. Despite this, we did not find any high-quality stock curves that are currently turning and giving appropriate entry signals that would be technically attractive. The shares of Nestlé and Galp Energia may offer more favorable entry points after a minor correction.
Best rated European stocks based on momentum ranking
Compelling technical picture
Nestle S.A. (daily): A longer-term downward trend can be observed, but there are already signs of a reversal. No further decline has occurred below the low of 75, suggesting that selling pressure is gradually running out of steam. Although the swing peaks of the rising waves continue to decline, this picture would change if, after a higher low, the price broke through the thin red trend line. This would be a clear long signal. A retest around 78 may be sufficient for the curve to give a long entry if the above conditions are met.
Galp Energia (daily): A structural change began on the curve in mid-July last year, followed by a deep but, from the perspective of long setups, non-critical retest. The rise in recent weeks has brought a new swing high, indicating that the trend has reversed. A more decisive retest could provide a favorable risk-reward ratio and a technically better entry point. There are still good long entry opportunities in the zone below 17.19 above the rising trend line. If the price rises above 18.75 on a sustained basis, it would also make a new peak likely.
List of stocks with a chance of a turnaround in the coming weeks
Most popular European 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.
Get more out of your investments!
Global Markets Services
OTP Global Markets offers a broad range of services in the field of local and international money and capital markets.
Read morePrivate Banking Services
Personal care and expertise with OTP Private Banking, along with the knowledge, security, and innovations of a multinational banking group.
Read more