COBHAM : Bearish scenario preferred
Entry price | Target | Stop-loss | Potential |
---|
GBX 293.3 |
GBX 0 |
GBX 301.3 |
+100% |
---|
Cobham has reached a level of resistance. This level could contain the upward trend in the short term.
The fundamentals remain very fragile. The downward revision on EPS for 2013 and 2014 let see some difficulties in the business for the company.
From a technical viewpoint, the proximity of the GBp 295 short-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.
The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: Cobham has all the characteristics for short selling. The first objective will be fixed near the GBp 277 short term support and by extension the GBp 255 area. This strategy should be protected by a stop loss above GBp 295.
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