A Reversal for Embraer SA (ADR) Is Not Near. The Stock Gaps Down

The stock of Embraer SA (ADR) (NYSE:ERJ) gapped down by $0.08 today and has $23.36 target or 6.00% below today’s $24.85 share price. The 7 months technical chart setup indicates high risk for the $4.47B company. The gap down was reported on Apr, 6 by Barchart.com. If the $23.36 price target is reached, the company will be worth $268.20M less. Gaps down are helpful for identifying a resistance level and to could also be used as a tradeable event. If traders are short the stock and it experiece gap down, then its usually advisable to hold the short for a bigger down move. Back-tests of such patterns show that two-thirds of the these patterns the stock performance worsens after the gap. The area gaps close 91% of the time, the breakaway gaps 1%, the continuation gaps 9% and the exhaustion gaps 64%. The stock decreased 2.47% or $0.63 during the last trading session, hitting $24.85. Embraer SA (ADR) (NYSE:ERJ) has declined 2.63% since August 28, 2015 and is downtrending. It has underperformed by 5.46% the S&P500.

Out of 17 analysts covering Embraer Sa (NYSE:ERJ), 6 rate it “Buy”, 1 “Sell”, while 11 “Hold”. This means 33% are positive. Embraer Sa was the topic in 6 analyst reports since July 31, 2015 according to StockzIntelligence Inc.

According to Zacks Investment Research, “Embraer Air is a customer-oriented company with experience in designing, manufacturing, selling, and supporting aircraft for the world’s commercial and defense markets. The company ranks among the four largest commercial aircraft manufacturers in the world with a well-established family of regional airliners, ranging from the 30-seat EMB 120 Brasilia turboprop to the 37-seat ERJ 135, the new 44-seat ERJ 140 and the 50-seat ERJ 145 jetliners. In addition, the company have launched a new family of jetliners - the ERJ 170, the ERJ 190-100 and ERJ 190-200.”

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