Spirit AeroSystems could reach its USD 40.5 resistance.

The company shows strong fundamentals. The consensus largely revised upward earnings and sales estimates for the two coming fiscal years, which let see a great potential for the security on the stock market. Margins should stabilize between 6.5% and 7% during the coming years, and EPS should reach USD 3.29 in 2014 whereas it was USD -4.40 in 2013. The security is undervalued compared to its peers, with an enterprise value estimated at 6.54 times EBITDA by the Thomson Reuters consensus for this year, and a P/E ratio at 11.5x for the same period.

Technically, the security shows a bullish configuration on all time scales. The stock could accelerate towards the USD 40.50 midterm resistance, benefiting from the recent expulsion gap. Moreover, prices are supported by increasing moving averages, especially the 20-day one, which helps the stock to stay dynamic near the uptrend.

Therefore, taking into account the strong fundamentals and technical patterns, it seems opportune to open a long position at the current price. The first target price is the USD 40.5 resistance. A breakout of this level will be a new bullish signal for higher target price. A stop loss will be placed under the 20-day moving average, threshold that would invalidate this trading strategy.