Sanderson Farms security shows good fundamentals and closes to a support area, which may lead to a technical rebound.

From a fundamental point of view, the fourth largest chicken producer in the United States is strongly advised to be bought, according to positive investment measures. In fact, the company says that it sees processing 3.067 billion pounds in fresh poultry for 2014 and 3.358 billion pounds for 2015. Moreover, Superformance ratings underline the company’s strengths that can be seen in multiple areas, such as its revenue growth, largely solid financial health with reasonable debt levels and a notable return on equity. Also, it has attractive valuation levels and solid stock price performance. Furthermore, the analysts’ consensus regarding the average target price is set at USD 89.8, which represents a great opportunity.

Technically, the security is in a negative configuration in the short term as the bearish trend of 20-day moving average, currently at USD 88.3, shows. Nevertheless, the stock seems being oversold, near to its USD 77.90 support in daily data, due to its 12 % down movement on last trading sessions. This level might stop the short term slumping and allow a technical rebound toward the resistances. Also, the Bollinger band width was reduced with the accumulation phase of recent sessions, confirming of lower volatility. In fact, the configuration could quickly take over an uptrend with the combination of all technical and fundamental factors.

Most active investors could therefore open buyers’ positions to aim the USD 84.85 first resistance; the crossing of this level would open the way to new objectives with a second technical target at USD 91.80. However the position needs to be protected by a stop-loss order around the USD 74.90.