Savanna Energy Services Corp. : Testing an important support
January 23, 2012 at 05:23 am EST
By
Entry price | Target | Stop-loss | Potential |
---|
CA$6.97 |
CA$0 |
CA$6.4 |
-100% |
---|
In the past few sessions, Savanna Energy Services Corp. 's share has suffered a sharp fall and now is coming back on important level of support.
From a fundamental viewpoint, the security is weak valued with price earnings ratio of 12.35 for this year, and for next year is estimated to 8.18. In addition, it has also a weak enterprise value to sales ratio at 1.17 for this year.
The stock follows a downward trend in the short term under the resistance area of 7.45 CAD. As well in the medium term the trend is neutral under the 10.4 CAD. However the selling pressure could soon run out of steam. Indeed, while the stock shows an oversold condition, the support area at the moment tested of 6.76 CAD might stop bearish trend in the short term.
Therefore, we might consider the support's proximity of 6.76 CAD as an opportunity to buy Savanna Energy Services Corp. 's share. We will aim at first target price of 7.45 CAD that is potential gain of 6.9%. Only if the security overcomes this resistance's level we could forecast an upwards trend to 9 CAD. We should cover the position with a stop loss under the support's level already tested.
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