Promising technical setup in a german defense stock
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Hungarian Equities - Technical Analysis
The BUX index has retested half of the downtrend; upside potential still appears limited, and a retest of another swing low is more likely. MOL’s share price has remained in a downtrend and could fall even lower than the most recent swing low of 4,844. Richter has also remained in a downtrend; more momentum is needed to break the trend. Only Magyar Telekom’s share price has broken out of its consolidation range and given a clear buy signal. Opus is still in a downtrend; a reversal is not yet in sight. Rába continued to trade within its consolidation range; another upward wave could follow later, provided the right conditions are met.
The U.S. Market Offers Fewer Compelling Buying Opportunities
The major U.S. indices turned lower last week, with key trendlines also coming under pressure. In such an environment, momentum is clearly favoring the sellers, making it difficult to identify attractive buying opportunities for the time being. The key question, of course, remains whether we are witnessing the beginning of a lasting trend reversal or merely a short-lived yet sharp correction. Accordingly, although a few stocks met the predefined screening criteria this week, none of them offered a particularly compelling entry point.
Although European markets rebounded last week, they have started this week under renewed, significant selling pressure, which, for the time being, does not favour those looking to enter long positions. Based on momentum, the selling side currently still appears to be stronger. Nevertheless, amongst the shares, we would highlight Hensoldt, which presents a clear technical picture and offers a favourable entry opportunity. The company primarily develops radar systems and other electronic warfare solutions for military and security purposes.
Best rated European stocks based on momentum ranking
Compelling technical picture:
Hensoldt (daily): The share price is trading within a consolidation range, which may soon come to an end. It is important to mention that there was an uptrend previously, followed by a period of consolidation which led to this narrowing range. This pattern favours a further rise, for which the price would need to break above the red ideal descending trendline. A bullish gap was also left open recently, which can provide additional confirmation of a breakout scenario if it remains unfilled. The 81.25 level should now act as support and is not expected to be breached. This level can also serve as a logical risk management threshold. The trend continuation pattern points to the potential for new highs, with the 125 area representing a possible longer-term target. From a risk/reward perspective, the setup remains attractive, favoring long positions.
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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