HomeAway, Inc. : Anticipation of a bearish reversal
October 08, 2012 at 09:36 am EDT
By
Entry price | Target | Stop-loss | Potential |
---|
$26.14 |
$0 |
$27.4 |
+100% |
---|
Indicators argue for a technical correction after the last bullish movement recorded in past sessions.
The fundamentals remain very fragile. The security seems highly overvalued compared to other securities in its sector.
From a technical viewpoint, the proximity of the USD 26.4 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.
Therefore, the proximity of mid-term resistance suggests a consolidation or a correction phase in the coming sessions. The most offensive will open a short position close to USD 26.4 to target a return on the USD 24.2 support. It should protect the position with a stop loss set above USD 26.4.
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