Are airline stocks taking off again?
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Our Equity Top Pick List
We have updated our Equity Top Pick List to reflect the events of the past quarter. The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. It can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. Technical analysis should be used to time / determine the specific investment decision.
Could the momentum return in the semiconductors?
The semiconductor sector has had a challenging quarter, with its performance in recent months lagging behind improvements in underlying fundamentals, even as AI-driven demand remained exceptionally strong. The accelerating adoption of AI by enterprises and the proliferation of AI agents are significantly increasing the demand for computing capacity, which points to a further surge in cloud services and data center investments. Given current supply constraints, record-high backlogs, and higher-than-expected investment needs, we expect further upward revisions to earnings forecasts in the semiconductor industry. Nevertheless, the sector’s valuation appears favorable from a historical perspective, which, in our view, could result in a more attractive risk-return profile in the coming months.
The improvement in market sentiment has had a positive effect on stocks that have already passed the accumulation phase. In recent days, the share prices of several airlines have started to rise after a prolonged correction. In today's analysis, we look at two of these companies that appear particularly promising: Delta Air Lines and United Airlines.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Delta Air Lines (daily): After a sufficiently long sideways movement, the price broke out upwards in recent days. Breaking above 62.5 indicates strength in the stock. The initial risk management level is 56.25, but later it is worth adjusting the exit point to the thick, ideal upward trend line. The pattern that has formed predicts a new high (81.25), but at least the previous high (68.75) is expected to be reached.
United Airlines (daily): This curve shows a slightly more favorable picture, with the 112.5 level being a key resistance, but the buy signal arrived yesterday. The risk should initially be managed by breaking through the 87.5 level. If we see a trend-reinforcing pattern and manage to break through the 112.5 level, this could open the way for a further significant rise. In this case, the target price could reach as high as 137.5.
List of stocks with a chance of a turnaround in the coming weeks
Most popular US 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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