The USD 31.8 support area, currently tested, might facilitate a technical rebound. The company’s fundamentals could validate this scenario.

From a fundamental viewpoint, analysts expect progressive sales growth for the coming years. Improving net margin is also anticipated for the current fiscal year, and EPS should reach USD 1.93 in 2014 and USD 2.18 in 2015, compared to USD 0.96 in 2013. The financial situation of the group is healthy, and the company benefits from low valuation levels. Indeed, the P/E ratio at 16.6x and the EV/sales ratio at 0.72x, both for 2014, present the attractiveness of this stock.

Technically, the security is in a negative configuration in the short term as shown by the bearish trend of 20-day moving average. Nevertheless, the stock returned to important support level near USD 31.8, and seems to be in an oversold situation. This level might stop the bearish trend in the upcoming session, bringing back towards its short term resistance of USD 33.6.

Considering technical and fundamental elements, it seems to be an appropriate timing to immediately open a long position in Foster Wheeler, in order to benefit from the USD 31.8 support area. A first target price will be the USD 33.6 resistance. A stop loss order will be placed under the mid-term support of USD 31.3. Only a crossing of USD 33.6 would validate a bullish trend in order to aim at a higher target price.