Avis Budget Group, Inc. CAR
Avis (CAR) is now down 62 percent from its high in January of 2015. CAR’s trailing earnings are $3.22 for past four quarters. Next year, FY16, the analysts think CAR will do $3.47 in EPS.
The green lines you see on the chart are a Fibonacci Measured Move from the high at $68.66. The current low on this chart is $22.93. Unfortunately I just found this today, 2/15/2016.
The trailing P/E on $3.22 is 8.1 with forward P/E of 7.5. Obviously Avis is not going out of business. As the premier car rental company CAR should command a P/E in the 12 / 13 area. A 12 P/E will take CAR back to $41.50 which happens to be a resistance area for the stock.
The trade is a buy at the open with a stop price under first support at $22.50. The next option would a breakout over $28.10 with a stop price under $22.50 again. The advantage to the breakout trade is CAR will have told you it wants to go high (most likely scenario). The disadvantage is the big stop. If you enter here make it with small shares until CAR shows a close above 28.10.