De La Rue plc : Double-bottom
Entry price | Target | Stop-loss | Potential |
---|
GBX 717.9 |
GBX 745 |
GBX 699.8 |
+3.77% |
---|
De La Rue’s stock was heavily penalized and is now in an oversold situation near a solid support area.
With an EPS estimated at 60.4 GBp for this year and 63.1 GBp for the next year, De La Rue is currently paid 11.78 and 11.27 times the results, which is not much.
After several weeks of downward movement, the stock is coming back close to an important support on which it has already initiate a rebound. The current configuration is a double-bottom on the GBp 710, which give argument for an upward movement toward GBp 745 and 766 by extension.
So as to make the most of a potential technical rebound of De La Rue, it seems opportune to open a long position near GBp 710 support. A confirmation of this pattern would enable the security to reach the GBp 745.5 resistance. Investors should not insist under GBp 710.5 and are better off placing a stop loss order under this threshold.
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