The USD 10.1 support, currently tested, should allow Exelis to rally again.

From a fundamental viewpoint, the company seems undervalued relatively to its peers with a EV/Sales of 0.45. In the recent months, the earnings estimates for the next year are regularly revised upward by analysts. With an EPS estimated at USD 1.77 for this year and USD 1.65 for the next year, Exelis is currently paid 6 and 6.41 times the results.

Currently, the stock is oversold and, in the mid-term, it is trading in a bearish trend. In the short term, this trend is reversed upon contact with the USD 10.1 area. Exelis should be able to confirm its increase in the next trading sessions. This support is a trading opportunity in order to anticipate a technical rebound towards USD 11.15 and by extension towards USD 11.8.

Investors can take a long position above USD 10.1. The downside potential is limited and the timing seems perfect to benefit from a technical rebound.
The objective will be fixed at USD 11.5. However, a bearish trend would regain the upper hand if the security crosses USD 10.1.