J Sainsbury plc : Anticipation of a bearish reversal
Entry price | Target | Stop-loss | Potential |
---|
GBX 265.16 |
GBX 0 |
GBX 285.03 |
+100% |
---|
The share is approaching a technical resistance and could return to a bearish configuration.
From a fundamental viewpoint, the EPS is expected to decrease by more than 60% in 2015 compared to 2014 according to analysts. This situation is due to the sharp decrease of net margins. Moreover EPS expectations are clearly in a downtrend movement as much as it has been often downgraded by analysts this year.
Technically, the security could run out of steam close to the GBp 272.3 resistance. Indeed, the stock is moving in an upward trend in the short term but it could know a halt. In this context, the downward movement could improve and it should expect a return to GBp 246.7. Indicators that show an overbought situation confirm this scenario.
Due to the technical configuration and its fundamental situation, investors can open a short position close to the GBp 272.25 resistance. The price target is set at GBp 246.7 and a stop loss will be placed around GBp 285.
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