Capita group is still tightly supported by a bullish trend line and a technical rebound has occurred on this level, supported by the 20-week moving average.

Fundamentals of the company argue in favor of a continuation of the bullish movement in the short term. Indeed, sales growth is expected to improve by +15% in 2013 to 3.8 million pounds and the profitability is still at high levels compared with its peers.

Technically, the bullish trend line encloses prices in a sharp upward trend. The trend is bearish in the short term after a severe decline which led the stock on the short term support. However, the technical configuration, with the 20-week moving average and the bullish trend line argue in favor of a technical rebound.

Thus, fundamentals of the company and the technical configuration should protect the stock from a continuation of the downward trend. Investors could take a long position at the current price to expect a return to the GBp 1018 and GBp 1057 resistances. A stop loss will be set under the GBp 975 short term support.