Overdone?

KUALA LUMPUR (May 31): Karex Bhd’s share price hit a low of RM1.83 this morning at 10.08am — also the lowest since its closing of RM2.25 on May 24 this year — after a research house highlighted an opaque outlook for the condom manufacturer as well as contraction in third quarter earnings.

Prior to this, the stock had been at its lowest two years ago, when it closed at RM1.83 on March 19, 2015. Karex’s net profit in the third quarter ended March 31, 2017 (3QFY17) contracted 28.3% to RM6.9 million from RM9.63 million a year earlier, on higher distribution expenses. Source

hourly.png

As per the above hourly timeframe, it appears that the share price has fallen way below the lower Keltner band. Thus, this increases the probability of a potential mean reversion.

weekly.png

From a weekly perspective, assuming there is a mean reversion, one possible price target for the rebound may be around RM2.06. For the purpose of risk management, possible stop loss may be set at around RM1.66.

Average consensus target is around RM2.06:

Consensus Estimates.png

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Markets Observer + Food Lover

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