Danieli & C. Officine Meccaniche S.p.A. : The EUR 19.5 support area is tested
April 05, 2013 at 03:54 am
By
Entry price | Target | Stop-loss | Potential |
---|
€19.57 |
€0 |
€19.2 |
-100% |
---|
Danieli's share price was heavily penalized and is now in an oversold situation near to a solid support area.
From a fundamental viewpoint, Danieli is undervalued in terms of enterprise value. Based on the current price, its market capitalization, minus its net debt, represents 0.15 times its revenues.
This valuation is just 9.54 and 8.5 times the two next years earnings.
The security follows a downward trend in the short term, under the EUR 20.8 resistance area.
However, the selling pressure could run out of steam soon. Whereas the stock shows an oversold condition, the EUR 19.5 support area currently tested might stop the bearish trend in the short term.
The trading strategy can benefit from the proximity of the strong support currently tested in order to buy Danieli in a good timing. Investors might placed a stop loss order at EUR 18.9 in order to avoid important losses.
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