Pearson, the international editorial house has seen its shares plunge since the end of January 2014.

Worst-than-projected earnings have been released on 28th February and estimates on 2014 are not so encouraging. Indeed, a decrease of about 15% is anticipated in terms of net margins and also fewer earnings should be reported by the end of the current fiscal year. During the last 12 months, analysts have been deteriorating its previsions on EPS dropping from $0.76 per share to $0.55 per share at today. Moreover, “Surperformance” trading rating is about 20%.

Technically, latest earnings release resulted on a continuation bearish gap of almost 5%, that has being partially filled in the following sessions. Once the midterm resistance tested at GBp 1054, prices felt again near the GBp 998 support. A breakdown of this support and the trend line should reinforce its bearish trend. The orientation of 20 and 50-day moving averages should help the share on its fall toward GBp 895.

Thus, investors could take a short position below GBp 998 looking for a target price at GBp 895. The stop loss will be placed over the entry point at GBp 1031.8.