Tate & Lyle plc : A technical correction is coming
By Pierre Gilles de la Londe
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 643.5 | GBX 0 | GBX 667.25 | +100% |
From a fundamental viewpoint, according to analysts, the company is expected to publish a decrease about 17.4% regarding sales in 2015, compared to 2014. Moreover EPS are also expected to drop like the last 3 years. This situation led analysts to revised downward their opinion.
Graphically, the stock went through a period of rebound in recent sessions towards the GBp 644 medium-term resistance. The share should consolidate near this area. It could act as a stopping point of the upward movement. This scenario suggests a return to the GBp 597.5 support area which will be a bearish objective.
The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: Tate & Lyle has all the characteristics for short selling. The first objective will be fixed near the GBp 597.5 short term support. This strategy should be protected by a stop loss above GBp 644.