The technical rebound of AVEVA Group should be stopped in the coming trading sessions.

The rebound recorded in the last trading sessions is not justified by AVEVA Group’s fundamentals which are still fragile. Indeed, analysts have largely revised downward their EPS estimates during the year. This situation could feed some profit taking in the coming sessions.

From a technical viewpoint, the security is in a bearish trend in the long and mid-term, even if prices have increased in the short term. The current technical rebound allows the stock to be close to its GBp 1608 resistance. Despite the breakout of the GBP 1666 resistance, prices should decrease soon because of the bearish trend in the long term. Moreover indicators highlight an overbought situation which legitimates our bearish scenario.

Investors can anticipate a return toward support area in the coming trading sessions. They can take a short position in AVEVA Group. The target price is fixed on the mid-term support at GBp 1255. A stop loss order could be placed above the GBp 1666 resistance area.