Joy Global Inc. : A technical correction is coming
Entry price | Target | Stop-loss | Potential |
---|
US$58 |
US$0 |
US$59.8 |
+100% |
---|
The upward trend seems to be running out of steam. The downward trend could be back.
The financial situation underline real difficulties to cash creation. The disappointment continues with a constant downward revision of the sales and earnings. The previsions for this year show a decrease of 13% of the sales and a decrease of 23% for 2014. In addition, the EPS revision has decreased of more than 50% during the last 12 months.
The graphical configuration argues to establish a short position at the current price. In fact, the end of the technical rebound, the consolidation phase and the overbought situation imply that Joy Global has all the criteria for a short selling.
The first objective will be fixed near the USD 54.35 short term support and by extension the USD 48.32 area. This strategy should be protected by a stop loss above USD 58.95.
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