International Distributions Services plc : A technical rebound under construction
By Anas Boumedian
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 403 | GBX 0 | GBX 384.8 | -100% |
The British postal company displays attractive valuation and profitability levels. The P/E ratio is valued at 14.0x in 2015 and 14.5x in 2016. The yield should increase from 3.34% this year to 5.22% in 2015, which is likely to attract investors. Indeed, analysts consensus targets GBp 467, which represents a significant potential gain.
Technically, the security sharply fell for several weeks. This fall lead shares towards the GBp 390 support area, which could become a stepping stone for a bounce in prices. This push could draw an upturn movement, thus launching the equity toward the GBp 435.4 resistance level. Even though daily moving averages are still in a bearish trend, the oversold situation could encourage a renewed interest in Royal Mail.
Therefore, it seems opportune to take a long position on Royal Mail security at the current prices. A confirmation of this pattern would enable the security to reach the GBp 435.4 resistance. Investors should not insist below the GBp 390 and a stop-loss order should be placed under this threshold.