Approximately one month following the FDA’s menthol announcement, selloff has caused British America Tabacco BATS to drop more than 50% in value from its all time high.
Although it's understandable this is concerning for investors, I don't believe it will ultimately have a huge effect even if the ban is passed into law.
Although I remain cautious, it has pushed...
Idea for swing trade
Share price consolidating at recent lows
Heavy price decline in 2018 due to declining tobacco volume consumption and US regulatory concerns but effectively the risks are pretty much priced in the current share price
Company has great profit margin
RSI divergence on 1D and 4H chart
Atleast 3:1 trade
The current economic indicators of the company show us that the fundamental situation is positive.
Profit margin: 184,96%
What's more on the chart we can see accumulation phase. There is a SOT formation here, you can also see the selling climax.
This may mean that the company's stocks are currently being bought.
BATS had a selling climax into 38.2% long term Fibonacci support when Philip Morris missed on earnings.
This was the end of the correction and the share is currently breaking out of its downward channel.
With a low PE en high dividend yield its the perfect time to buy the share.
A huge reward available with little risk