GKN : The resistance as main obstacle
By Pierre Gilles de la Londe
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 355.2 | GBX 0 | GBX 366.3 | +100% |
From a fundamental viewpoint, analysts have recently revised downward their EPS expectations, situation which could lead to some profit taking in the short run. Morevover, EPS should meet a tiny decrease about 3.3% this year compared to the previous one.
Technically, indicators highlighted an overbought situation in recent sessions. This indicator shows a limited potential for a possible recovery near the midterm resistance at GBp 366. Moreover prices are currently in contact with the GBp 356.8 resistance which argue for a decrease toward the short term support at GBp 337.8.
The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: GKN has all the characteristics for short selling. The first objective will be fixed near the GBp 337.8 short term support. This strategy should be protected by a stop loss above GBp 366.