Baoshan Iron & Steel Co., Ltd. : Back on its bullish trend
Entry price | Target | Stop-loss | Potential |
---|
CN¥4.17 |
CN¥0 |
CN¥3.93 |
-100% |
---|
Baoshan is principally engaged in the manufacture and trading of steel products and byproducts. The company provides three categories of steel products: carbon steel, stainless steel and specialty steel. The company is also engaged in steel related trade, shipping, coal chemical industry, information services and financial business .The CNY 4.11 support area, currently tested, might facilitate a technical rebound. The company’s fundamentals could validate this scenario.
According to Surperformance rating, the company is an opportunity for a trading strategy. Indeed, it is a good compromise between its value and its visibility. Moreover, brokers have lately revised upward their revenue estimates and count on EPS of CNY 0.42 for this year.
Technically, in daily data, even if moving averages are still in a downtrend, the positive reaction in the CNY 4.10 area should stop this trend and allow a technical rebound towards CNY 4.45. Moreover, technical indicators show a significant oversold condition which strengthens this bullish scenario. Finally, the stock crosses its 20-day moving average, which is a significant buy signal.
Considering technical and fundamental elements, it seems to be an appropriate timing to take immediately a long position in Baoshan in order to benefit from the CNY 4.10 support area. A first target price will be the CNY 4.45 pivot point, ie a potential of 5.4%, and by extension the CNY 4.75 resistance. A stop loss order will be placed under the long-term support at CNY 3.95.
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