ICAP reaches a level of strong resistance. This level could contain the upward trend in the short term.

The fundamentals remain very fragile. The decreasing trend on EPS revisions underlines the difficulties of the company to respect forecasts. The P/E ratio also shows a high valuation of the company.

From a technical viewpoint, the proximity of the GBp 422.2, the medium-term resistance, limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

The technical configuration and fundamentals lead us to predict a consolidation phase, at least in the short term. The GBp 422.2 should play its full role and stop the upward trend initiated in the short term. Therefore, in order to take advantage of this technical correction, a short position may be opened in the current area to target GBp 391.8. In case of further acceleration, the stop loss will be triggered above the GBp 422.2.