Central Garden & Pet Company : Close to an important technical resistance levels

11/24/2020 | 09:11am EST

Jordan Dufee

long trade Stop-loss triggered

Entry price : 41.04$ | Target : 45$ | Stop-loss : 38$ | Potential : 9.65%

Central Garden & Pet Company shares are closing in on important technical levels. The technical chart pattern suggests that the currently tested resistance will be broken and new upside potential arises while volatility is likely to increase. Investors could get ahead of this signal in order to benefit from a better risk/reward ratio. Investors have an opportunity to buy the stock and target the $ 45.

Summary

• In a short-term perspective, the company has interesting fundamentals.

Strengths

• There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.
• Over the past year, analysts have regularly revised upwards their sales forecast for the company.
• Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.
• For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
• The stock is in a well-established, long-term rising trend above the technical support level at 32.27 USD

Weaknesses

• The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.
• The stock is currently in contact with a medium-term resistance that must be gotten rid of so as to resume the upward trend.

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