After a technical rebound, the mechanical engineering manufacturer shows signs of weaknesses near the EUR 35.92 resistance.

According to Thomson-Reuters consensus, the company has a poor financial performance with sales expected to fall by more than 20% in current year, levels that could stay on the ensuing periods. EPS revisions sharply dropped from $2.20 per share to $1.87 nowadays, which means a decrease of 15% on prospects.

The stock remains in a bearish trend in the short term. The bullish channel has been preserved for long time but now GEA may fall as prices encounter an important barrier at the EUR 35.9 resistance. Despite the fact that daily moving averages still being well-oriented, the stock got overbought and now sellers may straight it up for going down.

Both the technical and fundamental elements lead us to predict a consolidation phase, at least in the short term. The EUR 35.9 should play its full role stopping the upward trend initiated before. Therefore, short positions may be opened now while targeting the EUR 33.5 support. In case of further acceleration, the stop loss will be triggered at EUR 36.3.