Capita is getting close to a resistance level that could be crossed in the coming sessions.

The company, selected in our “Conviction Buy List”, has strong fundamentals as suggested by its Surperformance ratings. The group enjoys strong revenue growth and an improvement on its net margin. Sales are expected to rise to GBP 4.3 billion this year, +12.6% compared to 2013. Moreover, net margin is expected to stand at 7.2% at the end of the year. Analysts are confident on the activities as they keep revising upward their revenue and EPS estimates.

From a technical viewpoint, the stock is getting close to its GBp 1235 resistance. The breakout of this level will be a bullish signal for investors to take long position. The equity is supported by increasing moving averages on all time scales, which militates for a continuation of the long term bullish trend.

Thus, investors should go long on Capita when prices will cross GBp 1235. The target will then be GBp 1350. Nonetheless, a stop loss will be placed under the entry point in case of failure of the bullish overflow.