The share is meeting an important level. We suggest to be cautious because this point could stop the bullish trend.

The company still showing poor fundamentals. Even if sales are expected to increase on the current fiscal year, its EBITDA is anticipated at lower levels than those registered in prior year. On the other hand, the security seems highly overvalued compared to its peers (P/E ratio of 24x for the current year).

Graphically, the share is in the middle of a technical rebound that allowed it to reach the GBp 327.5 mid-term resistance. This area could trigger a sell signal for investors in an scenario of profit-taking. The goal will then be fixed around GBp 290, corresponding to a pull-back on the trendline.

The graphical configuration argues to establish a short position at current prices. The end of the technical rebound, the consolidation phase and overbought situation: SkyePharma PLC has all the characteristics for short selling. The first objective will be fixed near the GBp 290. This strategy should be protected by a stop loss above GBp 327.5.