Capita plc : Powerful bullish trend
By Arnaud Le Berre
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 998.5 | GBX 0 | GBX 969 | -100% |
Fundamentals of the company argue in favor of a continuation of the bullish movement in the short term. Indeed, sales growth is expected to improve by +15% in 2013 to 3.8 million pounds and the profitability is still at high levels compared with its peers.
Technically, the bullish trend line encloses prices in a sharp upward trend. The trend is bearish in the short term after a severe decline which led the stock on the short term support. However, the technical configuration, with the 20-week moving average and the bullish trend line argue in favor of a technical rebound.
Thus, fundamentals of the company and the technical configuration should protect the stock from a continuation of the downward trend. Investors could take a long position at the current price to expect a return to the GBp 1018 and GBp 1057 resistances. A stop loss will be set under the GBp 975 short term support.