United Continental Holdings Inc : An appropriate purchase level
By Etienne Veber
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
US$52.01 | US$0 | US$49.8 | -100% |
The valuation levels of the company are low : P/E ratio of 4.91x expected for 2015 and EV/Sales of 0.73x for the same period. The EBIT should progress by more than 40% this year and reach the 5 billion dollars.
After several weeks of a downward movement, the stock is coming back close to an important support and a rising trend line. Moving averages are not well-oriented but technical indicators illustrate an oversold situation. The USD 51.25 area could cause a positive reaction for the coming trading sessions and allow a technical rebound towards the USD 56.3 short-term resistance and then the long-term target price is USD 62.95.
Thanks to the technical pattern and United Continental Holdings’ strong fundamentals, active investors can open a long trade above USD 51.25. The downside potential is limited and the timing seems perfect to benefit from a technical rebound. The goals will be fixed at USD 56.3 in a first time and then at USD 63. However, a bearish trend would regain the upper hand if the security crosses USD 51.25.