Centrica plc : Perfect timing to aim a technical rebound
By Camille Chretien
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 352.79 | GBX 0 | GBX 343.9 | -100% |
From a fundamental viewpoint, the company seems undervalued relatively to its peers with a "EV/Sales" ratio of 0.92x. Moreover the Return on Equity of Centrica is at 23.5% for 2013 compare to 13.9% for the sector. It means that the company is more profitable than its competitors.
Currently the stock is oversold and, in the short term, is trading in a bearish trend. This trend may be reversed soon upon contact with the GBp 348 long term support, corresponding to the 50-week moving average. Centrica should be able to bounce in the next trading sessions.
This support is a trading opportunity in order to anticipate a technical rebound towards GBp 374 and by extension towards GBp 395. So it seems opportune to take a long position at the current price. Investors should not insist under GBp 348 and are better off placing a stop loss order under this threshold.