Realty Income Corporation : Facing to a strong resistance
Entry price | Target | Stop-loss | Potential |
---|
$42.91 |
$0 |
$44.1 |
+100% |
---|
After a technical rebound, the stock could show signs of weaknesses near to the USD 43 resistance.
The fundamental analysis imply to be careful. In fact, despite optimistic forecast on earning, the group seems in trouble to follow its guidance as shown by strong downward revisions on EPS. The P/E ratio for 2014 and 2015 is very high compared to the sector and suggest an over-valuation of the stock price.
From a technical viewpoint, the proximity of the USD 43 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.
Therefore, most offensive investors will open a short position close to USD 43 in order to target a return on the USD 39.7 support. It should protect the position with a stop loss set above USD 43.
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