Equity securities close to a buy signal

All the attention of global media and financial markets is focused on the most important IPO in recent years. We are talking about the short placement of Saudi Aramco. Meanwhile, oil continues to move between the minimum and the maximum of the year 2018 without generating particular signals in one direction or the other. The main support is set at $ 54.07 and the primary resistance at $ 57.88.

At Piazza Affari the oil and energy companies headed by ENI and Enel continue to show good relative strength, but there is a petroleum title that has moved away from the annual highs.

We refer to Saras (MIL: SRS). The stock closed the trading day on November 18 at 1.574 after it reached an annual high of 1.81 on October 25th. A 13.03% drop in sixteen continuous days of decline.

Equity securities close to a buy signal

The best trading strategies are those that are based on two essential cornerstones: trend and valuation based on the normalized balance sheets of at least the last 4 years.

When a stock shows weakness and falls while losing price value, it will closely monitor the swing search that can generate a Buy trading signal.

On the basis of the analysts' recommendations, the estimates on the financial statements of the last few years lead to a fair value of 1.80 / 2.20 and therefore at current levels there is an interesting undervaluation.

Invest in the stock and buy the shares?

Although the current levels are interesting from the point of view of the balance sheet parameters, the graphic structure does not indicate a possible entry into the purchase with a favorable risk reward but we can say that Saras is one of the shares close to a buy signal.

When to buy?

At the moment only a weekly closing higher than 1.636 would generate a signal of purchase and end of the fall. Until this pattern occurs, further descents are possible up to the area 1.514 and then 1.35.

We will return to the topic at the appropriate time.