EVRAZ plc : The bearish trend continues
By Camille Chretien
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 93.95 | GBX 85 | GBX 94 | +9.53% |
Regarding company’s fundamentals, we can note major weaknesses. The debt of the company remains an issue and could threaten its solvency ; the leverage is estimated at 3.58x for the current year. Also, analysts from the Thomson Reuters consensus regularly revise downward their EPS estimates.
Technical analysis shows a bearish trend in the short-term : indeed, prices are very close to a major support area located at GBp 91.75 which, once broken, could extend the downward movement. Moreover, moving averages are trending down which reduces the probability for a short-term rebound.
Therefore, investors can take a short position after the breakdown of the support that should lead to a new phase of decline. The price target is set at GBp 82.6. A stop loss order will be placed above the GBp 91.75, threshold that would invalidate the strategy.