Howden Joinery Group Plc : Wait a comeback on the short-term support
By Camille Chretien
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 266 | GBX 273.7 | GBX 248.6 | +2.89% |
The high rentability of the company (profit margin 2012 of 9.5% versus sector : 7.5%) and the healthy financial situation (96.4 billion pounds in cash in 2012), justify its high valuation (P/E ratio 2013 of 18.16x versus sector : 15.1x).
Technically, the stock is enclosed in a sharp bullish trend since the beginning of 2012, supported by the 20-week moving average. However, prices began a slight bearish phase upon contact with GBp 273.7 and may come back to the GBp 255 support, corresponding to the 20-day moving average. The latter may help the security to bounce towards GBp 273.7, corresponding to a bullish trend line.
As a consequence, it seems opportune to wait a comeback on GBp 255 to take a long position in order to benefit from a resume of the uptrend. The first bullish objective will be GBp 273.7. A stop loss must be set below GBp 255, once the position is opened