Long Trade Idea
Enter your long position between $229.40 (the lower band of its horizontal support zone) and $238.14 (the upper band of its horizontal support zone).
Market Index Analysis
- Accenture (ACN) is a member of the S&P 100 and S&P 500 indices.
- Both indices trade near all-time highs but decreasing trading volumes do not support the uptrend.
- The Bull Bear Power Indicator of the S&P 500 Index turned bullish but remains below its descending trendline.
Market Sentiment Analysis
Equity futures are drifting lower after the Dow Jones Industrial Average recorded another record high, and the S&P 500 is approaching its own record. Retail sales data could inject volatility today, but tomorrow’s January NFP report remains the core economic driver this week. Earnings from Coca-Cola and volatility in gold, silver, and Bitcoin are other factors to monitor today. Despite the two-day rebound, tech companies face downside pressure from surging memory costs, which threaten profits and margins, while Alphabet plans the first 100-year bond since the dot-com era.
Accenture Fundamental Analysis
Accenture is a multinational professional services company with over 770,000 employees, specializing in information technology (IT) services and management consulting. It operates five business units: Strategy and Consulting, Technology, Operations, Accenture Song, and Industry X.
So, why am I bullish on ACN following its 20%+ plunge?
Over the last three months, Accenture announced $900 million in new generative AI contracts, emerging as a preferred partner in AI-led enterprise transformations. I am bullish about CAN due to its first-mover advantages and deep ecosystem partnerships, including its massive contract with the US Department of Veterans Affairs to modernize its health records. The focus on cloud and security contracts should improve margins, and valuations are reasonable following its sell-off.
Metric | Value | Verdict |
P/E Ratio | 19.57 | Bullish |
P/B Ratio | 4.80 | Bearish |
PEG Ratio | 1.87 | Bullish |
Current Ratio | 1.41 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earning (P/E) ratio of 19.57 makes ACN an inexpensive stock. By comparison, the P/E ratio for the S&P 500 Index is 29.90.
The average analyst price target for ACN is $292.42. This suggests excellent upside potential with decreasing downside risks.
Accenture Technical Analysis
Today’s ACN Signal
- The ACN D1 chart shows price inside a massive horizontal support zone.
- It also shows price action below its ascending Fibonacci Retracement Fan.
- The Bull Bear Power Indicator is bearish with a positive divergence.
- The average bullish trading volumes have increased since price action reached support levels.
- ACN corrected as the S&P 500 Index advanced, a bearish confirmation, but breakout catalysts have accumulated.
My ACN Long Stock Trade
- ACN Entry Level: Between $229.40 and $238.14
- ACN Take Profit: Between $291.09 and $299.82
- ACN Stop Loss: Between $207.03 and $217.93
- Risk/Reward Ratio: 2.76
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