British American Tobacco should undergo some profit-taking after the rebound in recent sessions.
From a fundamental viewpoint, the company could suffer from downward EPS revisions from analysts. Indeed, this situation could lead the stock to more pronounce profit taking.
After a substantial upturn, the stock now approaches the resistance at GBp 3794.5, fact that could inverse the tendency. In addition, a high RSI indicator should entice a marked fall close to the short term GBp 3554 support. Moreover, in daily data, shares have just feed a double bottom pattern which could act as an additional argument for some profit taking.
The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: British American Tobacco has all the characteristics for short selling. The first objective will be fixed near the GBp 3554 short term support. This strategy should be protected by a stop loss above GBp 3794.5.