Rexam security has sharply fell lately and is back now on interesting entry levels.

From a fundamental viewpoint, the packaging company is cheap with a P/E Ratio of 10.8x for 2014 and 11.8x for 2015. Besides, EV/Sales is low with a ratio at 1.09x for this year. EPS should increase to 40.9 pence this year against 13.1 in 2013. Furthermore, Barclays targets GBp 520.

The security follows a downward trend in the short term, under the GBp 464.7 resistance area. The trend is bearish also in the mid-term under this level. However, the selling pressure could soon run out of steam. Indeed, whereas the stock shows an oversold condition, the GBp 440 support area currently tested might stop the bearish trend in the short term and boost prices to fill the recent downward gap at GBp 475.

So as to make the most of a potential technical rebound of Rexam security, it seems opportune to open a long position at the current price. A confirmation of this pattern would enable the security to reach the GBp 485.3 resistance, which will be the target price. Investors should not insist under GBp 430, it is advisable to place a stop loss order under this threshold.