After a technical rebound, the stock is showing signs of weaknesses near to the GBp 935 resistance.

From a fundamental viewpoint, the company activities show no real sign of progression as sales are expected to decrease this year. Moreover, analysts have revised downward their revenue and EPS estimations for the coming years, proving that sales are not in a good dynamic. Furthermore, the group seems overvalued compared to its peers with a P/E ratio of 20.5 times 2014 estimates.

Graphically, the stock went through a period of rebound in recent sessions towards the GBp 935 medium-term resistance. The share should consolidate near this area as this level could act as a stopping point of the upward movement. This scenario suggests a return to the GBp 889 support area which will be a bearish objective.

The graphical configuration argues to establish a short position at the current price. Reed Elsevier has all the characteristics for short selling. The target will be fixed at GBp 889. A stop loss will protect any bullish overflow above GBp 935.