China Mengniu Dairy (2319.HK) Jumped Despite of Issuing a Profit Warning
Medion Jim June 9, 2020 3:44 AM
China Mengniu Dairy (2319), a dairy products manufacturer, issued a profit warning, saying 1H net income is expected to drop 45% to 60% on year due to an increase in the costs associated to COVID-19.......
China Mengniu Dairy (2319), a dairy products manufacturer, issued a profit warning, saying 1H net income is expected to drop 45% to 60% on year due to an increase in the costs associated to COVID-19. The Co said: "The Group’s revenue in April and May 2020 had recovered and recorded a double-digit growth compared to the same period in 2019 (....) The recovery of the overall operations of the Group has been continuously improving."
After that, the stock prices jumped around 7% after the announcement. Although the company issue a profit warning, the announcement also mentioned the resumption of operation and recorded growth in April and May.
From a technical point of view, the stock accelerated to the upside and broke above the resistance level around HK$30.00 (the high of February and May) on the daily chart.
Both 20-day and 50-moving averages are pointing up, indicating a bullish outlook. The RSI also records a recent high, suggesting an upward momentum for the prices.
Bullish readers could consider to set the support level at HK$29.00 (the low of June 8), while resistance levels would be located at HK$33.05 (the high of January) and HK$34.60 (record high) respectively.
Source: GAIN Capital, TradingView
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.