Dairy Crest Group plc : Take a position on breakout
March 01, 2013 at 04:54 am EST
By
Entry price | Target | Stop-loss | Potential |
---|
GBX 425 |
GBX 477.8 |
GBX 422.8 |
+12.42% |
---|
Dairy Crest Group could exceed the symbolic threshold of GBp 436.6.
Regarding the fundamentals, firstly, we note that the consensus from Thomson Reuters has revised upward EPS estimates for this year. Moreover, the valuation of the security is very low, as shown by the PER which is 5.83x for 2013.
Technically, the share has a bullish configuration on all time scales. Prices are supported by increasing moving averages as shown by the 20-day, and enclose the stock in a dynamic upward trend. This configuration should help the stock to overflow the GBp 436.6 resistance, level which would lead prices towards the GBp 477.8 level.
Therefore, investors will benefit from the signal given by the crossing of the GBp 436.6 resistance to take a long position in the stock. The objective will be set near GBp 477.8. Once the position is opened, a stop loss should be fixed under effective entry point to guard against a trend reversal.
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