MLP SE : A technical correction is coming
By Bastien Chabasseuil
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
€5.03 | €0 | €5.13 | +100% |
The fundamentals analysis shows weaknesses and the recent revision on EPS is a major negative argument. During the past 12 months, analysts revised by -40% the EPS for 2013 and 2014. The security seems highly overvalued compared to other securities in its sector and is paid 8.57 time its EBITDA.
Graphically, the stock went through a period of rebound in recent sessions towards the EUR 5.05 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 EUR 4.8 support area and in a second time the trend line around EUR 4.5.
The upside seems limited as shown by fundamentals and technical configuration. In contact with the EUR 5.05 resistance, a movement of consolidation could return the stock towards the EUR 4.8 mid-term support. As a result, the most aggressive investors could take a short position near EUR 5.1 but they need to set a stop loss above this resistance because the crossing of this level would invalidate our scenario.