The USD 4.07 support area, currently tested, might facilitate a technical rebound. The company’s fundamentals could validate this scenario.

From a fundamental viewpoint, the security is cheap with a P/E Ratio of 11x for 2015 and 8.7x for 2016.
Besides, EV/Sales is low with a ratio at 0.43x for this year.

Technically, the security fell sharply for several weeks. This fall has lead Skullcandy towards the USD 4.07 support area, which could become useful as a stepping stone for a technical rebound. The target of this bullish trend is the USD 5.07 resistance. Even though moving averages are still in a bearish trend, the oversold situation could encourage a renewed interest in Skullcandy.

Thanks to the technical pattern and Skullcandy’s strong fundamentals, active investors can open a long trade above USD 4.1. The downside potential is limited and the timing seems perfect to benefit from a technical rebound.
The goal will be fixed at USD 5 in a first time.
However, a bearish trend would regain the upper hand if the security crosses USD 4.1.