The GBp 725.5 support area, currently tested, might facilitate a technical rebound. The company’s fundamentals could validate this scenario.

From a fundamental viewpoint, the company has a value in line with the industry as its enterprise value ratios show. Growth perspective are encouraging as revenues should progress by 50% in a 2017 horizon.

Currently the stock is oversold and, in the mid-term, is trading in a bearish trend. In the short term, this trend should be reversed upon contact with the GBp 725.5 area. Essentra should be able to confirm its increase in the next trading sessions. This support is a trading opportunity in order to anticipate a technical rebound towards GBp 791.5 and by extension towards GBp 820, the 50 and 100-day moving averages.

Considering technical elements, it seems to be an appropriate timing to immediately open a long position in Essentra in order to benefit from the GBp 725.5 support area. A first target price will be the GBp 791.5 resistance, ie a potential of 6%. A stop loss order will be placed under the mid-term support currently tested.