Vodafone (VOD) shares have caught my attention today because they have fallen back to 115p which means the price is now very close to the bottom of the recent trading range. Furthermore on both a technical and fundamental basis they do represent a good buying opportunity in my view.

Fundamentally the shares are fairly cheap at the moment because according to analyst expectations at the current price of 115p, the PE ratio for the next two years is 7.71 and 7.13 respectively. The future (predicted) dividend yield at this level is also very appealing at 7.2% and 6.5%, which is an outstanding return for a FTSE 100 share.

On a technical basis they are also starting to look oversold. The stochastic (8,3,3) has dipped below the 20 level and the RSI is also approaching oversold levels as well.

So although the price may fall slightly further in my opinion, I personally think a price of between 110p and 115 represents a good opportunity to go long and a price target of 125 - 130p should be easily achievable in the short-term.

(Disclosure: Author currently holds a long position on Vodafone (VOD) as of May 21).

 

 

Filed under: UK Stocks

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