Perpetual Limited : A technical correction is coming
By Maxime Nonglaton
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
A$25.56 | A$0 | A$26 | +100% |
The fundamentals remain very fragile. The security seems highly overvalued compared to other securities in its sector.
Technically, the security could run out of steam close to the AUD 25.8 resistance. Indeed, the stock is moving in an upward trend in the short term but it could know a halt. In this context, the downward movement could improve and it should expect a return to AUD 24. Indicators that show an overbought situation confirm this scenario.
The upside seems limited as shown by fundamentals and technical configuration. In contact with the AUD 25.8 resistance, a movement of consolidation could return the stock towards the AUD 24 mid-term support. As a result, the most aggressive investors could take a short position near AUD 25.8 but they need to set a stop loss above this resistance because the crossover of this level would invalidate our scenario.