John Wood Group is coming near to a major resistance. EPS estimates of the company for 2013 and 2014 has recently been revised downward and this could drive the stock in a correction phase.

From a technical viewpoint, the proximity of the GBp 875.5 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

Therefore, the proximity of mid-term resistance suggests a consolidation or a correction phase in the coming sessions. The most offensive will open a short position at the current price to target a return on the GBp 806.5 support. It should protect the position with a stop loss set above GBp 875.5.