A long-term turnaround is taking shape at the German biotech company
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Hungarian Equities - Technical Analysis
The BUX index has begun to show signs of a correction, but there has not yet been any confirmation of a significant change in its structure. MOL’s share price has stabilized above the 5,000 forint level following the dividend payment; a break below this level could pave the way for a deeper correction. Richter broke through the 12,500 forint support level, further reinforcing the downtrend. Magyar Telekom’s share price continues to trade above the 2,500 forint level, though it is being squeezed into an increasingly narrow range below the downtrend line. Opus remains in a downtrend following the formation of a new swing low. Rába’s share price bounced off support around 3,125 forints and continues to maintain the trend-confirming pattern.
Investor Sentiment Reflects Cautious Optimism
In our Institutional Investor Survey, we are providing a unique opportunity for our institutional clients to share and gain insights on market expectations and sentiment. Our focus is on Hungarian assets in the context of regional and global trends. Here, we highlight the most notable insights.
European markets have reached key support levels thanks to the recent corrections. However, the downturn has not yet given way to a turnaround. This is confirmed by our screening list, which shows few or no promising opportunities. In such a market environment, momentum-based turnaround strategies are typically less effective, which is why, once again, only a few companies met our screening criteria. From the list, we highlighted the German life sciences and biotechnology company Sartorius AG, which develops and manufactures laboratory and biopharmaceutical production equipment, as well as related services. We see a long-term turnaround opportunity, so seeking long positions may be worth considering.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Sartorius (daily): A structural shift has finally appeared on the chart after a long time. The downtrend broke weeks ago, but only a break above the 250 level indicates that the structure is changing and an uptrend may be on the way. A gap around 312 is expected to be filled, so this could also be the target price. It’s advisable to manage risk by exiting the position if the thick green trendline is broken.
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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