Essar Energy is trading in a bullish trend and several elements argue for the continuation of this trend.

The company’s fundamentals are still strong. The company is undervalued compared to its peers with an "EV/sales" ratio estimated at 9x for 2013 and a PER at 15x for the same period. Analysts from Thomson Reuters consensus have revised upward their EPS estimates.

Technical patterns are in the green: prices are up for several months. The movement should continue in the coming trading sessions. Prices failed twice crossing the GBp 149 short term resistance and are now coming back to the GBp 142 short term support, corresponding to the bullish channel. The 50-day moving average should help to reach the short term resistance again.

Thanks to these good indicators, it seems relevant to take a long position in Essar Energy at GBp 142. The target price is the GBp 153 resistance. A stop loss will be fixed under GBp 142 because a breakdown of this level would damage technical pattern.