Healthway Medical: 20c target.

Standard Chartered has suggested a target price of 20c for Healthway Medical. They arrived at this target price after highlighting a slew of difficulties the company faces:

1. Opening chain of clinics in China and setting up specialist center in Singapore are facing challenges in execution.

2. The group has not delivered good execution in its specialist services in the past and has limited experience of organic expansion.

3. Mass exodus of prominent specialist doctors from Healthway’s employment is also troublesome. 

4. Cost pressure mounting due to aggressive expansion.

I am almost 100% divested and I am still waiting for its share price to fall to a more reasonable level before I load up once more because if the management does deliver on its expansion plans, the company's share price would fly. At the current price, valuation is simply astronomical.

Standard Chartered's target price of 20c implies a PE of 36x!  This is almost as ridiculous as Q&M Dental Group's valuation when they first listed!  Please bear in mind that my considerations here are based on FA.  There is no accounting for sentiments.

Related post:
Healthway Medical: Second quarter results.

SPH: $4.20 is still resistance.

On 9 September, I said "although a correction could be avoided if volume expands in the next few sessions as price pushes upwards, such a move would have a formidable sell queue to clear at $4.20. If ever this resistance was cleared, SPH's share price could fly.  At the moment, chances are slim that this would happen".  Well, $4.20 is still the resistance to watch.

Today, another black candle was formed, the third in a row, as price touched a low of  $4.13 before closing at $4.16.  The MACD seems set to form a bearish crossover with the signal line while the OBV continues to decline. Distribution is underway. The MFI has emerged from the overbought region which suggests that demand is no longer zealous.  The RSI although declining is still in the overbought territory and this suggests that we could see buying momentum slow down further.

The rising 20dMA should provide immediate support at $4.10 and this was also a natural candlestick resistance level. Would $4.10 hold as a support? We would have to wait and see.

Related post:
SPH: Touched $4.20.