Rayonier Inc. : Anticipation of a bearish reversal
By Bastien Chabasseuil
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
$46.53 | $0 | $47.4 | +100% |
The fundamentals remain very fragile. The security seems highly overvalued compared to other securities in its sector with a P/E ratio estimated at 23.95x for 2014. Moreover, analysts have recently revised downward EPS estimates for the 2 coming years.
Graphically, the stock went through a period of rebound in recent sessions towards the USD 47 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 USD 44.25 support area which will be a bearish objective.
The upside seems limited as shown by fundamentals and technical configuration. In contact with the USD 47 resistance, a movement of consolidation could return the stock towards the USD 44.3 mid-term support. As a result, the most aggressive investors could take a short position near USD 47 but they need to set a stop loss above this resistance because the crossing of this level would invalidate our scenario.