STOCKS NEWS EUROPE-Bumper sales push Unilever to record high

Wed Jan 23, 2013 3:44am EST

Shares in Unilever surge to a record high after the Anglo-Dutch consumer goods group reports a rise in sales that beats market forecasts and leads the company's stock to the top of both Britain's FTSE 100 index and the pan-European FTSEurofirst 300 index.

Unilever's London-listed shares rise as much as 3 percent to an intraday high of 2,522 pence in heavy volume of just under half its 90-day daily average after less than an hour of trade. The stock later pares some of those gains and is up by 2 percent at 2,501 pence by 0835 GMT.

"They've put in a stellar set of results. I will definitely be a buyer of the stock but not at these levels, where it's looking overbought," says Hartmann Capital trader Basil Petrides.

The relative strength index (RSI) reading of Unilever's London-listed shares is currently at just above the 70 point mark, which indicates that a stock is technically "overbought" and is often used by some traders as a sign to sell that stock for a profit in the near term.

Petrides says he might buy the stock if it falls to between the 2,345-2,395 pence level.

Oriel Securities keeps a "hold" rating on Unilever shares, arguing that European rivals Nestle and Danone are expected to have slightly faster earnings per share growth rates.

"Overall, re-rating potential appears limited. However, earnings growth is clearly accelerating," Oriel Securities writes in a research note on Unilever.

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