After a rebound without fundamental improvements, the security might have a new bearish trend toward the GBp 1395 support area.

From a fundamental viewpoint, the group has not sufficient quality to justify a continuation of its bullish trend. Indeed, Surperformance rating largely punishes Anglo American because of an excessive valuation with an EV/Sales ratio of 1.30x, higher than its peers. The deterioration of the financial situation and the increasing leverage for the two next fiscal year emphasize risks. Net Debt/EBITDA ratio at 0.99 should become worst next year at 1.27.

Graphically, the security is trading in a bearish trend on the mid and long term. In the short-term, the stock has rebounded on the GBp 1207 support area toward its mid-term resistance. This rebound seems technical and is not likely to continue. Indeed, moving averages in the long-term are still in a downtrend and that argue for a continuation of the decrease in prices.

The bearish trend and fragile fundamentals let envisage a continuation of the downtrend. An entry point could be fixed close to the GBp 1544 resistance in order to take a short position in Anglo American. The target price will be the mid-term support area at GBp 1395 and a stop loss order will be placed above GBp 1544.