The technical rebound of Anglo American should be stopped in the coming trading sessions.
The rebound recorded in the last trading sessions is not justified by Anglo Americans fundamentals which are still fragile. Indeed, the Thomson Reuters consensus has recently revised downward EPS estimates. It is often an indicator of the coming decline in profitability.
From a technical viewpoint, the security is in a bearish trend in the long and mid-term, even if prices have increased in the short term. The current technical rebound allows the stock to be close to its GBp 1259 resistance. Despite the breakout of this resistance, prices should decrease soon because of the bearish trend in the long term.
Therefore, fragile fundamentals and technical pattern let see a downside potential. Investors can take a short position close to the GBp 1259 resistance area and aim a return in the GBp 1145 support area. A stop loss will be fixed above GBp 1259 because a breakout of this threshold would invalidate this trading strategy.