The Swatch Group should benefit from an upward momentum after qualitative results.

The Swiss watchmaker has published its activity for the first semester (July 23). The figures stand above the consensus with a profit increase of 6.1% to CHF 768 million. Certainly, the operating margin decreased by 180 basis points to 22.7%, following the acquisition of Harry Winston, bought one billion dollars, but management stay very optimistic for the second semester.

Technically, the stock is building a technical rebound towards CHF 560. This recovery is very energetic, with a gap, and shows the determination of buyers to take the upper hand. The current development could even exceed the next resistance to reach the bearish gap of May, around CHF 575. A purchase can therefore be set up on current prices by placing a stop loss below the 20-day moving average at CHF 525.