SSE plc : Opportune entry point
Entry price | Target | Stop-loss | Potential |
---|
GBX 1,399 |
GBX 0 |
GBX 1,381.5 |
-100% |
---|
The GBp 1395 support area, currently tested, might facilitate a technical rebound. The company’s fundamentals could validate this scenario.
From a fundamental viewpoint, the company seems undervalued relatively to its peers with a EV/Sales ratio of 0.64. In the recent months, the earnings estimates for the next year are regularly revised upward by analysts.
With an EPS estimated at GBp 113.69 for this year and GBp 120.21 for the next year, SSE is currently paid 12.31 and 11.64 times the results.
SSE is oversold because and near the GBp 1395 (Short term support and bullish trend line). This situation gives credit to a potential technical rebound. Thus, the stock could find new energy and would rise towards the next GBp 1455 resistance.
So as to make the most of a potential technical rebound of SSE, it seems opportune to take a long position at the current price. A confirmation of this pattern would enable the security to reach the GBp 1454 resistance, and then the GBp 1510. Investors should not insist under GBp 1395 and are better off placing a stop loss order under this threshold.
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