Sonic Automotive, Inc. : To new upward targets
December 04, 2012 at 08:12 pm IST
By
Entry price | Target | Stop-loss | Potential |
---|
US$19.67 |
US$22 |
US$19.46 |
+11.85% |
---|
Sonic Automotive could breakout the USD 20 resistance in the short term.
The valuation levels remain intact with an attractive valuation level (PER at 13.3x for 2012 and 10.1x for 2013).
Graphically, the security is up 33% since the 1st January. It seems able to continue this uptrend supported by moving averages and will soon test the USD 20 mid-term resistance. We anticipate a crossing of this level, given the upward orientation of the stock in the medium and long term. Above USD 20, a buy signal will be given.
Therefore, investors could take a long position in Sonic Automotive, on crossing of the USD 20 mid-term resistance. A stop loss should be placed at USD 19.46.
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