Drax Group plc : An opportune reversal
By Etienne Veber
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 640 | GBX 0 | GBX 619 | -100% |
From a fundamental viewpoint, the security has many qualities. According to Thomson Reuters, the net margin is expected to rise by 28% by 2015. Indeed, regarding analysts' estimations for the future, the company is moving to a recovery.
Technically, the uptrend in the medium and long term should protect the stock of a major downtrend. In the short term, a decline has lead the share to the GBp 623.5 support and now forming a double bottom near the level. Therefore, a technical rebound will fix an objective near the GBp 672.5 short-term resistance.
Consequently, we expect a rebound on the GBp 623.5 with the help of a double-bottom in order to reach the short term resistance (GBp 672.5). The most active investors can buy the share with a stop-loss placed under the GBp 623.5 support.