Linamar Corporation : The bullish trend could resume
Entry price | Target | Stop-loss | Potential |
---|
CA$24.58 |
CA$0 |
CA$23.6 |
-100% |
---|
We anticipate a rebound on the Linamar's stock towards new historical records.
Company's fundamentals are strong. The valuation of the company is low with a PER estimated at 9.20x and an EV/Sales ratio of 0.62x for this year. Furthermore, sales are expected to rise by 8.6% in 2013 and the net income by 17.8%.
From a graphical viewpoint, prices are well oriented in the medium and long term with increasing moving averages in weekly data. However, in the short term the stock is running out of steam and came back to the 20-week moving average. Prices are not so far from the CAD 22.9 mid-term support and the bullish trend line. Thanks to these elements, the security should bounce towards the CAD 26.8 medium term resistance.
Thus, it seems interesting to take a long position at the current price in order to aim a rebound towards CAD 26.8. The crossing of this level would pave the way for new historical highs. A stop loss must be placed below the CAD 24 support.
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