Given the way shares in Enables IT Group PLC LON:EIT have been in a bear run for much of the post autumn 2013 period, it is hardly surprising that we have an opportunity to bottom fish this situation given the recent ultra oversold RSI status of this market. While it has to be admitted that just because we have seen readings towards the 0/100 zone this does not necessarily mean that there will be a sustained move to the upside, technical analysis is based on statistics and this state of affairs does increase the likelihood of at least an intermediate rebound for the stock. Indeed, it may actually be that the idea of the shares having just delivered a double bounce off the floor of a falling trend channel from July towards 5p is a more compelling buy argument than the shares merely being oversold.
The expectation from this point would be that at least while there is no weekly close back below the floor of the 2014 price channel we should be treated to a reasonable rally. Just how high this could stretch is indicated by the July resistance line currently running at 14p. This would clear the 200 day moving average at 12p, above which the extended bear trend of Enables IT Group PLC LON:EIT can be said to have finally been turned around.
Enables It Group PLC, formerly Nexus Management plc, is a United Kingdom-based provider of cloud computing, managed and professional services. The Company’s solutions include business continuity, data center services, hosted communications, help desk services and professional services. The Company has two main geographical segments, namely the USA and Europe. It provides cloud solutions, cloud application hosting and virtual desktops.