Good fundamentals and the support of the 20-day moving average should help prices to reach recent highs.

From a fundamental viewpoint, analysts predict improvement of the group's profitability for the coming years. Analysts from Thomson Reuters largely revised upward their earnings and sales estimates for the current and the next years. EPS is anticipated at GBp 19.2 in 2014 compared to GBp 15.5 last year. The financial situation is healthy, with a finance of GBP 101 million for the current fiscal year. Even if valuation levels are slightly high for the sector, with a P/E ratio at 18.6x for 2014, the consensus is largely buyer and shows the good potential for the stock.

Graphically, the stock fell back to the GBp 288 midterm support, after tested its GBp 392 midterm resistance. The contact with this support permitted prices to regain a new bullish dynamic. The 20-day moving average, which follows prices, appears as a support to help the stock to cross the GBp 365 short term resistance and to continue the trend toward the GBp 392 resistance.

Therefore, investors can open long positions on Howden Joinery Group, with a target price at GBp 392. Nonetheless, a stop loss order will be set under the 20-day moving average.