The German manufacturer of pharmaceutical products, Stada Arzneimittel, could confirm its technical rebound, in the coming trading sessions, and reach its annual highs.

The company benefit from encouraging sales estimates, as shown by an expected growth of 7.5% in 2013. The accuracy of analysts' estimates reinforce the relevance of such expectations. Net profit is skyrocketing (almost multiplied by 4 last year) and may nearly double this year to reach 164 million euros. Eventually, the security is, currently, paid 12.3 times estimated profit of 2013 compared to 15 times, for the sector.

Graphically, the trend is bullish in the medium and long term. However, prices ran out of steam before bouncing on the EUR 31.2 support, corresponding to the 100-day moving average. The security is, nonetheless, still stopped by the 50-day moving average. The breakout of the latter would allow the stock to confirm its rebound and come back to its annual highs, around EUR 34.8.

Thus, we would wait the breakout of the 50-day moving average to take a long position in Stada Arzneimittel. The target will be EUR 34.8. In order to avoid any downtrend, a stop loss must be set below the 50-day moving average.