A turning point for textbooks at Givaudan in Switzerland
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Commodities - Technical Analysis
There has been no change in the downward trend for gold and silver, but selling pressure is easing for both precious metals. As long as the trend lines driving the decline remain intact, a sustained reversal cannot be expected. The price of oil has broken through the 100 level, and the trend remains upward for now. Natural gas may correct higher following a sharp price decline. Copper, trading within a wider range, may be approaching the upper end of that range. After sharp declines, wheat and corn prices may have reached key levels where the likelihood of a reversal is increasing.
Following the correction, European markets have not yet been able to return to an upward trajectory. At present, consolidation is the prevailing trend, while the dominant downward trends remain in place. In such a market environment, momentum-based swing trading strategies are typically less effective, which is why, once again, only a few companies met our screening criteria. Of these, we highlight the Swiss company Givaudan in today’s analysis, as Verbund was already featured in our September 7 analysis. Givaudan is one of the world’s leading manufacturers — and the market leader in several segments — of flavorings, aromas, fragrances, and cosmetic active ingredients. Its technical picture is particularly favorable: the chart shows an almost textbook-perfect reversal, and another upward breakout could soon emerge from the consolidation phase.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Givaudan (daily): This chart presents an ideal picture in every respect. It has already given a buy signal, but after three waves of consolidation above 3,125, it is attempting to break out upward, which could be a perfect uptrend scenario. The minimum expected target price is 3,750. Of course, a move toward the 4,063 level is also a possibility. Keep an eye on the thick green uptrend line; if it breaks, it would be wise to manage risk.
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.
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