The CAD 30.8 support area, currently tested, might facilitate a technical rebound. The company's fundamentals could validate this scenario.

From a fundamental viewpoint, Norbord is undervalued in terms of enterprise value. Based on the current price, its market capitalization plus its net debt, represents 1.23 times its revenues. This valuation is just 7.3 and 7.8 times the two next years earnings. Furthermore, EPS estimates have been revised upward in the last few months by analysts.

For few weeks, the stock is trading in an horizontal trading range between CAD 30.8 and 37.5. A recent fall has led Norbord close to the CAD 30.8 support, which could become useful as a stepping stone for a technical rebound. This level also corresponds to a bullish trend line. The 50-week moving average should facilitate a return toward the CAD 34 pivot point firstly and, then the CAD 36.2 resistance.

Therefore, the proximity of the 30.8 support is an opportunity to take a long position in Norbord. The first goal is a return in the CAD 34 pivot point area, that is a potential of 10%. A stop loss order can be placed the support currently tested.