Bullish outlook for Keller despite last week's falls

Last week shares in Keller came off sharply but one must not lose sight of April’s 10% share price advance, which saw them climb up psychological resistance at 1,000p.

The ground engineering specialist's stock price is now hovering at about 970p. A successful consolidation of those levels, near its closest up-trend line, would consolidate the 1,000p area as a level of technical support, previously resistance. That may see the share price series restructure for a renewed push to the upside.

Indeed, the correction seen last week may even by a healthy development for the stock, which had come close to being ‘oversold’.

As long as the stock price continues to carve out successively higher highs and lows the final direction of the shares would seem to be clear.

With a view to the very short-term, the trend will remain bullish as long as the shares remain atop said trend-line.

Technical support at 940p should be closely watched and may be a good level for investors to place their stop-loss orders as a precautionary measure.

In 2014 Keller obtained revenues of £1.6bn and analysts expect top-line growth of 14% according to FactSet data. Anticipated earnings per share next year of 86p means the shares now trade on approximately 11.6 times’ forward earnings - much lower than its peers in the sector.

That means the potential value of the company may be higher than its competitors’.