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Valuetronics, will it have a nice rebound after a 50% drop

Valuetronics started going down since 24 July after it hit a top of 0.59. After a sell down for 3 over month, it dropped to the recent low of 0.285, exactly a 50% drop. Technically it is not difficult to tell that the support at 0.30 is quit strong and the fact that price bounce off from this support quickly may indicates that buyers consider 0.3 as “cheap price” and confirmed the strength of the support. From fundamental perspectives, the recent quarterly financial statement release on 12 August reported that revenue increased 2.5% and net profit increase 1.8%. The numbers reported are not exciting but they are not bad either. So far as the price already dropped 50%, seems the “not so bad financial report” becomes a reason to support the price. In addition, the current market price of valuetronics is only around 1.25 times of its NAV, also indicates that the stock is not risky as of now in terms of the “value” of the company. One may consider buy on the breakout of the high for the past a few trading days and expect the stock to have a nice rebound thereafter. Stop loss can be set right below the low for past a few trading days. It is need to take note that the upcoming quarterly report for valuetronics is likely to be release around 11-12 Nov, those who trade short term may need to sell before the release of the report to avoid short term uncertainty bring by the report.

Weekly chart:

Ramba:

Robin Han
Robin Han

Dr. Robin Han, a graduated from NUS with a Ph.D in Department of Chemical and Biomolecular Engineering, has been actively trading in Singapore stock market since 2007. His passion has let Dr. Robin to become a full time trader since 2010. He has extensively share his experience with his fellow investors on trading Singapore stock market using both technical analysis and fundamental analysis.

Dr. Robin is a regular guest speaker for radio 95.8 on financial program. He also has been invited by different companies and societies to conduct educational seminars on stock investments, including Shares Investment, Wealth Directions (Founder: Dennis Ng), Traders Round Table, SIM, Raffles Business International, Online trader's club and Alpha Alliance. He is also contracted by N2N (a listed trading software provider in Malaysia) as their overseas educational speaker in stocks.