Debenhams Plc : Perfect timing to aim a technical rebound

02/18/2013 | 04:13am Opinion : Bullish above 94.2 GBp Target price : 106.2 GBp Stop loss: 91.2 GBp

LONDON STOCK EXCHANGE Retail – Department Stores

In the past few sessions, Debenhams shares have suffered from a sharp fall and is now coming back on a significant level support.

From a fundamental viewpoint, the security is cheap with a PER of 9.31x for 2013 and 8.46x for 2014. Besides, EV/Sales is low with a ratio at 0.61x for this year.

Technically, in daily data, even if moving averages are still in a downtrend, a positive reaction in the GBp 94.2 area should stop this trend and allow a technical rebound towards GBp 106.2. Moreover, technical indicators show a significant oversold condition which strengthens this bullish scenario.

Therefore, the proximity of the GBp 94.2 support is an opportunity to take a long position in Debenhams. The first goal is a return in the GBp 106.2 resistance area. In fact, the security has to cross this area in order to re-establish a bullish trend in the short term. A stop loss order can be placed under the support currently tested.

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