The U.S. Market Offers Fewer Compelling Buying Opportunities
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International Markets - Technical Analysis
Among U.S. indices, both the S&P 500 and the Nasdaq have broken their upward trends,which had been lasting for months. There is room for a correction, so it may only be worth buying well below current levels. The Russell 2000 began its decline earlier and has continued to fall since then. The DAX and the Stoxx 600, on the other hand, are showing some reversal from their strong support levels, but this appears to be more of a correction. The index tracking emerging markets has also broken below the lower boundary of its trading range and has begun a trend-like decline.
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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.
Best rated US stocks based on momentum ranking
Compelling technical picture:
We did not identify any momentum-based buying opportunities this week.
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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