Kennametal is coming near to a major resistance level and could be driven in a correction phase.
The group recently released (on 25 July) disappointing 2013 fiscal year results. Indeed, sales decreased by 5% in comparison with last year and EPS were $2.52, compared with the prior year EPS of $3.77.
Graphically, the stock went through a period of rebound in recent sessions towards its bearish trend line, corresponding to the USD 42.7 resistance. The latter could act as a stopping point of the upward movement and the share may consolidate. This scenario suggests a return to the USD 40.7 support area which will be the first bearish objective.
The upside seems limited as shown by fundamentals and technical configuration. In contact with the USD 42.7 resistance, a movement of consolidation could drive the stock towards the USD 40.7 support. As a result, the most aggressive investors could take a short position at the current price ; but they need to set a stop loss above this resistance because the crossing of this level would invalidate our scenario.
Kennametal Inc. is an industrial technology company, which serves customers across the aerospace and defense, earthworks, energy, general engineering and transportation end markets. The Company's segments include Metal Cutting and Infrastructure. The Metal Cutting segment develops and manufactures tooling and metal cutting products and services and offers an assortment of standard and custom metal cutting solutions to diverse end markets. The Metal Cutting segment offers products, including milling, hole making, turning, threading and toolmaking systems used in the manufacture of airframes, aero engines, trucks and automobiles, ships and various types of industrial equipment. The Infrastructure segment produces engineered tungsten carbide and ceramic components, earth-cutting tools, and advanced metallurgical powders, for the aerospace and defense, energy, earthworks and general engineering end markets. The Infrastructure segment markets its products under the Kennametal brand.
KENNAMETAL INC. 
