Uber and Mosaic Are Showing Signs of a Reversal
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International Markets - Technical Analysis
U.S. equity indices, with the exception of the Nasdaq, have pushed to fresh record highs recently, while the sequence of higher swing lows and higher swing highs remains intact. Until we see a decisive downside session that breaks the primary uptrend structure, a meaningful reversal is unlikely to materialize. DAX is following a similar pattern: as long as the series of progressively higher lows remains intact, the probability of a corrective phase remains limited. The STOXX 600 is showing relative weakness, however, even here we are still waiting for the formation of a lower high. In contrast, the Emerging Markets Index may be at risk of forming a lower high if it fails to break above 68.75, which would leave the market under continued selling pressure.
Despite the government crisis, the Romanian stock market is near record highs
Romania has been under a caretaker government since early May, after the Social Democratic Party, together with an opposition party, successfully tabled a no-confidence motion, thereby bringing down the Romanian government. Subsequent attempts to form a government have been unsuccessful, and for now, it is unclear how the government crisis might be resolved. Despite the political uncertainty, the Romanian stock market has performed very well so far this year; the BET index is currently the fifth-best-performing stock index globally. With that in mind, we examined what might happen next in Romania.
As momentum in the market’s leading sectors begins to moderate, high-quality laggards are increasingly moving into focus. In today’s technical analysis, we highlight two stocks that are showing encouraging signs following several months of accumulation: Uber, which is also included on our Equity Top Pick List and Mosaic, one of the world’s largest fertilizer producers. We examine the technical setup and key price levels for both stocks.
Best rated US stocks based on momentum ranking
Compelling technical picture:
Mosaic (daily): The stock has posted three consecutive days of strong gains. From a longer-term perspective, this is highly encouraging, although it has not yet broken above the 25 level. However, it has left upside gaps behind and appears to be preparing for a reversal following a prolonged accumulation phase. The chart is now suitable for buying on pullbacks. The minimum expected price target is around 31.25, though higher levels may become visible later on.
Uber (daily): After an extended period of sideways trading, the stock has shown several strong buying days followed by consolidation. The buying wave was not followed by concentrated selling pressure, which points to a potential trend reversal. The stock has not fallen back below 75 for a week, and that level has now turned into support, which is a positive sign and increases the likelihood of a sustained reversal. The minimum price target is 87.5, but the stock could also move toward the 94 area.
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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