KepCorp Elliott Wave Analysis
KepCorp released their full year results showing record full-year profit as well as dividends on 24th Jan 2013. There was a lot of expectation that the share price would gap up and open much higher the next day. There is a gap between 11.51 and 11.58 as highlighted in the below chart. I had thought that this gap would finally be filled if indeed KepCorp gaps up with the results announcement. KepCorp’s share price did gap up but by a mere 6 cents at 11.40 from the previous close of 11.34.
This is quite a disappointing increase and a review of the KepCorp share price chart might reveal details for the weak increase. Looking at the price and volume on the price chart, it is clear that the selling that started from 19 Oct 2012 was with high volume (red arrow). This indicates that the selling is actually strong selling. The move down is clearly an impulsive move.
The recovery of KepCorp share price that followed was also strong initially but the volume started to go down as the price increased in a choppy move. Initially, the momentum was also rising as can be seen from the MACD. Right from the beginning of 2013, the volume started to pick up as did the price. The MACD was still rising but at a more gradual pace until finally, it has now flattened and started to turn down.
The recovery phased has formed a trend channel and the final candlestick that was formed after the announcement of the record earnings could not even touch the upper trendline.
If even such a positive news could not lift the share price significantly higher, the view is that the recovery phase is at the final stage and buyers are already invested in the stock. Any further upside would most likely be capped at 11.58 (to fill the gap). The share price is likely to head lower from here.