Pearson plc : A technical correction is coming
By Pierre Gilles de la Londe
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 1,237 | GBX 0 | GBX 1,276 | +100% |
Regarding fundamentals, analysts have recently revised downward their EPS forecasts from GBp 66.5 in 2013 to GBp 53.5 in 2014 due to the expected net margin's degradation in 2014.
After a substantial upturn, the stock now approaches the GBp 1241 resistance, fact that could inverse the tendency. In addition, indicators shows an overbought situation which should lead to a marked fall close to the short term GBp 1170 support.
Due to the technical configuration and a downgraded fundamental situation that does not justify the current valuation of the group, investors can open a short position close to the GBp 1241 resistance. The price target is set at GBp 1170 and a stop loss will be placed above GBp 1241.