EV Energy Partners may come back to its bearish trend, in the coming trading sessions.

From a fundamental viewpoint, the group has not sufficient quality to hope for a continuation of its recent bullish trend. Indeed, Surperformance rating largely punishes EV Energy Partners because of an excessive valuation with an EV/Sales ratio (8,18x for 2013) higher than its peers. Despite an anticipation of leverage improvement for the next two years, the financial situation of the company is still fragile.

Graphically, the security is trading in a bearish trend in the medium and long term. In the short run, the stock has rebounded on the USD 33.5 support area toward its mid-term resistance. This rebound seems technical and is not likely to continue. Indeed, moving averages in the long-term are still in a downtrend and that argue for a continuation of the decrease in prices.

The bearish trend and fragile fundamentals let envisage a continuation of the downtrend. An entry point could be fixed close to the USD 41.5 resistance in order to take a short position in EV Energy Partners. The target price will be the short-term support area at USD 38 and a stop loss order will be placed above USD 41.5.