Spirent Communications has finished its rebound and should now start a bearish trend.

From a fundamental viewpoint, the company has not a lot of qualities with reduced business predictability and high valuation compared to its peers : this does not argue for investors' interests. Indeed, its EV/Sales ratio is at 2.2x compared to 0.77x for the sector. Further, the P/E ratio is estimated at 20.6x for 2013 (sector 13.2x). Eventually, analysts polled by the Thomson Reuters consensus regularly revised downward their earnings per share estimates.

The trend is bearish on all time scale as shown by the orientation of moving averages. The stock bounced on the GBp 118 support without any fundamental improvement. This bullish short term trend should be stopped by the GBp 127.3 resistance, corresponding to the 20-day moving average, in order to come back to GBp 118.

Thanks to all these elements, most active investors can take a short position in Spirent Communications and anticipate a pullback toward GBp 118. A stop loss will be placed above the GBp 127.3 resistance.