Imagination Technologies Group should undergo some profit-taking after the rebound in recent sessions.

The company still displaying poor fundamentals. Even if sales are expected to increase on the current fiscal year, its EBITDA is anticipated at lower levels than those registered in prior year. On the other hand, the security seems highly overvalued compared to its peers.

Technically, the security could run out of steam close to the GBp 162.1 resistance. Indeed, the stock is moving in an upward trend in the short term but it could know a halt. In this context, the downward movement could improve and it should expect a return towards GBp 126.5. Indicators that show an overbought situation confirm this scenario.

Due to the technical patterns and poor quality fundamentals that do not justify the current valuation of the group, investors can open a short trade close to the GBp 162.1 resistance. The price target being set at GBp 126.5, a stop-loss order could be placed above GBp 162.1 for limiting further risks.