German Healthcare Giant Shows Signs of a Comeback.
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Buying Opportunities Have Disappeared from the U.S. Market
A strong wave of selling swept through the U.S. stock markets. There was significant profit-taking in the technology sector, and the sector rotation observed earlier failed to substantially improve sentiment in other segments as well. Accordingly, it is not surprising that there are currently no stocks showing reliable signs of an upward trend accompanied by strengthening momentum. Although it is still possible to rank stocks at this time, there are no opportunities with an attractive risk-reward ratio based on technical analysis. For this reason, we are not issuing a buy recommendation for any stock this week.
International Markets - Technical Analysis
Following the retest, the S&P 500 came under strong selling pressure once again and issued another sell signal. In the case of the Nasdaq, sellers had already taken control earlier, so the decline began sooner there. Both indices may still have room for further declines, possibly even down to the midpoint of their previous uptrends. The Russell 2000 had already been considered an underperformer, though some sector rotation supported its performance last week. The DAX and Stoxx 600 indices also corrected higher last week; however, the magnitude of these corrections has already reached the desired level and has even become slightly overbought in the short term. As a result, buying opportunities are currently less attractive. The index tracking emerging markets continues to trend downward, though it may soon reach an important support level from which a significant rally or correction could emerge.
European markets seemed to be struggling in recent weeks, but following the declines, patterns suggesting a correction have emerged on the indices, with an increasing number of stocks signaling a possible turnaround. However, the technical charts of the companies on the list still do not reflect clear trading opportunities. For this reason, this week we are analyzing one stock from the momentum list: Siemens Healthineers. The company is part of the Siemens Group and is one of the world’s leading manufacturers of medical devices.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Siemens Healthineers (daily): We are seeing a shift in the longer-term downtrend. The bounce following the sideways movement around 34.38 already hinted that a change was underway, but the recent breakout from the 37.5 level indicates that buyers may have taken control. Risk management can be handled by closing below 37.5 euros. A close above 40.6 euros could open up upside potential, with the 43.75–50 zone becoming a target. Even in the event of a retest, it may be worth looking for a long entry as long as the price remains above 37.5.
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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