Downer’s 1H net profit of $78m beat most forecasts and FY17 net profit guidance was raised 7% – to $175M.
The strong result suggests that the earnings recovery is well underway for Downer, and gaining momentum.
The recent results release saw the stock pop sharply, up to $7.50.
The stock has since retraced to close the gap, finding support in the $6.60 region.
Yesterday’s action saw a buy signal off this support region and that’s our opportunity to consider longs.
Traders can be buyers around current levels, with targets to $7.50.