CPI - Reversal play with strong fundamentals
Updated
Technical Analysis
Price Targets
Financials & Quality Screen
- Jan to April 2022 CPI entered a phase where it was oversold as shown by the 1M William %R entering below the -80 level. Signaling a potential mean reversion play or reversal play.
- Since 25 April the stock has been moving upwards and is now on the verge of confirming a reversal play on the 1Wk chart but with William %R on the 1Wk chart being above -20 I expect the stock to consolidate between $31.44 and $24.60 prior to deciding its 1M and 1Wk direction.
- A break below $24.60 the 1Wk continuation play would be triggered as it would show signs of low buying momentum/demand etc. and I expect the bottom of $20 to be tested again.
- A break above $31.44 would signify high demand/ volume and potential shift in momentum.
Price Targets
- If BUY triggered I expect an initial target of $44-$56 (+36% to +78%) with further upside expected if momentum shifts significantly in the markets or we see news/catalysts pushing price past $56.
- If SELL triggered I expect an initial price target of $19-$21 (+14% to 22%) with further downside expected if it breaks support below.
Financials & Quality Screen
- EV/EBIT: 3.86
- ROIC: 25.02%
- Piotroski F Score: 6
- Excellent sustainable growth rate: 316
Note
Still waiting for price to cross over $31 to signal a Long.
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