Talktalk is a British provider of pay television, telecommunications, internet access, and mobile network services to businesses and consumers in the United Kingdom. The Stock has recently showed a double top near its resistance.

Even if increasing sales are expected for this company in 2014, its EBITDA is anticipated to decrease by more than 59% and the net income to drop near the half of last year earnings. These estimations reveal the inability of Talktalk to transfer its sales into real earnings. At the same time, debts and leverage are supposed to sharply increase for the current year. Moreover, the equity is clearly overvalued (56.2x).

Technically, the security recently experienced a double top pattern near the GBp 325.8 resistance; which marks an uptrend becoming a downtrend. Thus, the timing is perfect for a position taking at the pivot point (GBp 314.7) in order to seek for the target at GBp 297.7 (the neckline of the double top). If the downtrend continues under the short term support (GBp 297.7) as is meant to happen for a pattern confirmation, a new strategy appears having as target the GBp 281.5.

Hence, investors could take a short position on the equity at its current price in order to profit from a decline in the direction to the GBp 297.7 target and by extension the GBp 281.5. For this strategy the stop-loss order could be placed at GBp 326.