Compagnie Industriali Riunite S.p.A. : Reaching a bearish trend line
By Camille Chretien
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
€0.88 | €0 | €0.91 | +100% |
From a fundamental point of view, the stock is largely overvalued with a PER 2013 of 49x. EPS estimates has been revised downward by the Thomson Reuters consensus. The debt level is high with a Debt/EBITDA ratio of 8.13x in 2012.
Graphically, the share is in a technical rebound phase which allowed it to reach a bearish trend line, around EUR 0.9. This area could trigger a sell signal for investors which may take their profit on the security, especially since the last trading sessions showed a high investors' indecision. Thus, this level would be a peak for the next sessions if not broken out in daily closing price. A comeback to the EUR 0.83 may happen in the coming days.
The technical configuration as well as fundamentals the CIR group' security let think there will be a consolidation, at least in the short term. The bearish trend line at EUR 0.9 should stop the bullish dynamic. As a consequence, to benefit from a technical correction, a short position could be opened at the current price with EUR 0.83 in line of sight. In case of a new bullish acceleration, the stop loss will be triggered above the EUR 0.9 resistance.