Wm Morrison Supermarkets : The area of GBp 263 might facilitate a technical rebound
October 11, 2012 at 01:18 pm IST
By
Entry price | Target | Stop-loss | Potential |
---|
GBX 274 |
GBX 0 |
GBX 261.55 |
-100% |
---|
Wm. Morrison Supermarkets shows relatively strong fundamentals and is coming back to attractive price.
From a fundamental viewpoint, Wm. Morrison Supermarkets is undervalued in terms of enterprise value. Based on the current price, its market capitalization, minus its net debt, represents 0.48 times its revenues.
This valuation is just 9.87 and 9.14 times the two next years earnings.
Technically, in daily data, even if moving averages are still in a downtrend, a positive reaction in the GBp 263 area should stop this trend and allow a technical rebound towards GBp 283.9. Moreover, technical indicators show a significant oversold condition which strengthens this bullish scenario.
Active investors can take a long position above GBp 263. The downside potential is limited and the timing seems perfect to benefit from a technical rebound. The goal will be fixed at GBp 283.9. However, a bearish trend would regain the upper hand if the security crosses GBp 263.
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