Hello Dave,
When there is a conflict between technicals and fundamentals, following the technicals is usually the safer course ... where one may lose opportunity but one does not lose capital.
KEA's previous earnings report looked fine but the stock has continued on a downtrend since. I'd rather wait until KEA finds base and reverses back up ... stock should find support at 18-20 which was a resistance level in early '97. In fact KEA's price action reminds me of COMS after they reported what appeared to be "sterling" results.
But why KEA for a long trade when there are other stocks with stronger momentum. As for an investment, I'd wait for confirmation of robust fundamentals and not mind paying 10-15 percent more for some assurance that a large upside potential is indeed there. Generally market sentiment overrides fundamentals in the near-term. As such, the whole yr2k sector has gotten slaughtered, witness CHRZ, IMRS, MAST, SYNT, etc. The software sector for the most part got creamed too, with the exception of MSFT and ADBE ... look at ORCL, SAP, CATP, etc. KEA is associated with a sector that is being slaughtered, and is part of another sector that is getting creamed. Guess my drift is clear. |
