Diamondback Energy should have a new bearish trend in the coming trading sessions.

From a fundamental viewpoint, the group has not sufficient quality to hope for a continuation of its bullish trend. Indeed, Surperformance rating largely punishes Diamondback Energy because of an excessive valuation with an EV/Sales ratio higher than its peers. Despite an anticipation of leverage improvement for the next two years, the financial situation of the company is still fragile.

Technically, the security had a technical rebound but there is still a bearish trend in the mid-term. The bullish impetus should be stopped in the coming trading sessions. Thanks to it, the security has reached USD 69.75. 20-day moving average has been broken but the stock should return to its lowest levels toward USD 62.55.

The bearish trend and fragile fundamentals let think about a continuation of the downtrend. An entry point could be fixed close to the USD 69.75 resistance in order to take a short position in Diamondback Energy. The target price will be the mid-term support area at USD 62.55 and a stop loss order will be placed above USD 69.75.