Dollarama, a company who offers a broad range of consumer products and general merchandise for everyday use, is trading in a bullish trend in the short and the long term. Moreover, several arguments are in favor of the continuation of this trend.

The company shows strong fundamentals according to Surperformance ratings. Firstly, the high valuation of the group shows a great investors confidence because there are willing to pay a high price for the stock. Then, the consensus revised upward EPS estimates for this year (CAD 2.21) and that let see a great potential for the security on the stock market. In addition, sales estimates for 2015 is at CAD 2.3 billion (+12%) and 2.6 billion for 2016.

From a technical point of view, patterns are in the green: prices are up for several months. Increasing moving averages let think there will be no reversal in the coming trading sessions. Furthermore, the stock breakout an important level (the 50% Fibonacci retracement in daily data). This growth should help to reach soon the CAD 102 resistance.

Therefore, taking into account the strong fundamentals and technical patterns, it seems opportune to open a long position at the current price in order to benefit from a possible reversal. The main target price will be the CAD 102 resistance (potential +15%). A breakout of this level will be a new bullish signal for higher target price. However, a stop loss will be placed under the 20-day moving average at CAD 84.9.