Amphenol' stock, after running out of steam, is back to an interesting entry level.

The company is highly profitable with a net margin of 12,9% in 2012 compared to 10.8% for the sector. During the last 4 months, analysts polled by Thomson Reuters have globally revised upward their earnings per share estimates. Eventually, the financial situation is healthy with a leverage (net debt/EBITDA) of only 0.8x in 2012.

On July 18, the stock slid 9.7% after the management team lowered by 1% its forecast for 2013 earnings (to $3.73/$3.79 from $3.76/$3.85). The market has overreacted and prices are back to an interesting buying level. Indeed, the security bounced on the USD 75 threshold and is now supported by a bullish trend line and the 100-day moving average. Thus, the stock may resume its uptrend and come back to USD 83.5, corresponding to the second highest of 2013.

As a consequence, a long position can be opened at the current price. The first objective is USD 83.5 then 85.4 by extension. A stop loss must be triggered below the USD 75 support.