A turning point for textbooks at Givaudan in Switzerland
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Hungarian Equities - Technical Analysis
The index is still trending upward, and a reversal pattern has yet to form. MOL’s share price stabilized above the 5,000 forint level following the dividend payment. A significant correction could still occur. Richter has once again found support at the 12,500 forint level and has not yet broken its upward trend. Magyar Telekom’s share price is trading sideways above the 2,500 forint level but remains within a downtrend. Opus continues to trade in a downtrend following a new swing low. Rába remains in a consolidation phase following its previous sharp rise. It could re-enter a buying zone in the range below 3,125 forints, particularly near the 2,500 level.
Trend-amplifying patterns in semiconductors
The markets remain near their all-time highs, while there appear to be few attractive opportunities at the moment, as the momentum-based screening list yields hardly any viable results. Today’s list does not feature stocks rebounding from a prolonged downtrend, but rather two stocks that are attempting to break out of strong trend-confirming patterns and offer entry opportunities with tight risk management. It’s worth keeping an eye on AMD and Intel, two of the world’s leading semiconductor companies, where attractive entry opportunities could emerge even in the short term.
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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