Momentum favours Meta
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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 U.S. equity markets are trading near all-time highs, yet broad-based market momentum remains absent. Many stocks have already posted substantial gains, and the rotation seen in recent weeks has so far resulted only in a brief catch-up rally among laggards. Individual stock stories may once again come into focus. This week, we took a closer look at Meta’s chart. On Friday, we also shared the stock as a trading idea, supported by a series of positive developments and encouraging news flow surrounding the company.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Meta (daily): A significant breakout from the downtrend occurred last week. This reversal could mark the return of a buy-the-dip environment. The $625 level may serve as the ideal retest area and, at the same time, an attractive entry point for long positions. The previous high, around $781, appears to be a realistic upside target. The stock also left an upside gap during the breakout. A controlled pullback into this gap, followed by a clear bullish reaction before the gap is fully closed, would provide additional confirmation that buyers remain in control. Such price action would reinforce the breakout thesis and improve the risk-reward profile of a potential long position.
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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