Linamar Corporation : A trading opporunity
By Anas Boumedian
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
CA$65.65 | CA$0 | CA$62.9 | -100% |
The company displays a low valuation level with a P/E ratio of 11.9x for 2015, which theoretically limits the downward potential. Moreover, it benefits from analysts' optimism, who regularly revise upward earnings estimates, and target on average a 16% appreciation potential.
Technically, the stock evolves in a bullish trend on the medium and long term. On the short term, the trend turned neutral due to a consolidation phase inside the CAD 65/72 trading range for several weeks. The proximity to the CAD 65.24 support now could revive the bullish trend in the short term.
Therefore, it would be opportune to open a long position on the stock to target the CAD 72 resistance. However, a stop loss should be placed under the CAD 65.25 support.