John Wood Group PLC : Bullish triangle
By Oscar Salza
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 679.5 | GBX 0 | GBX 655 | -100% |
From a fundamental viewpoint, the company seems weak valued in terms of enterprise value. Based on the current price, the enterprise's capitalization reprocessed its financial position net of debt, representing approximately 0.72 times its turnover, and 0.63 for next year.
In the recent months the earnings prospects for 2011 were revised upward by analysts covering the enterprise, due an important contract signed by the group in November. The EPS for this year is expected at 3 GBP. According to Thomson Reuters, we expect a turnover rising by 2013.
Technically, the short and mid-term trend is bullish. However, the share is close to an important resistance level, situated at 689 GBP. This psychological line was recently tested many times.This resistance with a transversal support, which we have drawn, gives an opportunity to detect a “Symmetrical Continuation Triangle” formed on John Wood. This chart pattern is considered as a bullish signal, indicating that the current upward trend may continue. Also it indicates that the price could rise to the range of 725/735 GBP. We could fix a second and more ambitious target at 800 GBP, in order to fill the important gap recorded in July.
If the share cross our transversal support, our scenario will be invalidate, for this reason we suggest a stop loss under 655 GBP.