The USD 117.5 support area, currently tested, might facilitate a technical rebound of shares in the intelligence and surveillance contractor.

The company’s fundamentals could validate this scenario. Quarterly results beat market expectations; earnings of $180 million were posted. Its operations in the European countries such as United Kingdom and Germany significantly increased; moreover, similar improvements were made in both the American and Asian markets where South Korea operations grew 42% in 2013. The low P/E ratio of only 14 times estimated earnings constitutes an opportunity for acquiring shares at discounted prices. In addition, lower debt levels are expected to provoke the fall of leverage ratio from 2.13x to 1.93 and smaller levels in the long term as for example 1.39x by 2016.

L-3 Communications recently assigned a patent for enhanced methods of cellular environment detection when inter-operating with timed interferes. The $117.5 area represents a significant support for prices in order to avoid further drops. A bullish wave should be draft after this contact pushing the equity toward the upper side of the ascending pattern as it reaches the USD 125.6 weekly resistance.

Therefore, investors could buy L-3 Communications shares at $119 (current prices). Although, the main target is set at $125.6, the trend will be confirmed once the $122.6 broke up. A stop loss order should be considered under the daily support at $117.5.