UTi Worldwide Inc. : Bearish trend should continue
Entry price | Target | Stop-loss | Potential |
---|
$11.6 |
$0 |
$12.3 |
+100% |
---|
In a bearish trend, UTi Worldwide should stop its rebound in the short term because of the proximity of the 20-day moving average.
The company is fragile and fails to be profitable in 2013. For the current year difficulties are expected to continue and analysts have sharply revised downward their EPS estimates and are now expecting a loss (USD -0.45 against USD 0.77 expected 12 months ago). Moreover, sales are not encouraging and are not expected to grow in the coming exercises.
From a technical viewpoint, prices are in a downward trend. Moving averages are trending down and put pressure on the stock, which confirms this downward momentum. This trend may continue toward the USD 9.76 support.
Taking into account fundamental and technical elements, investors can initiate a short position at the current price in order to target USD 9.8. A return above the 20-day moving average, the short-term resistance, will invalidate the bearish strategy, which justifies a stop loss.
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