This week, Sing Medical (“SMG”) caught my attention.

SMG has dropped 39% from $0.725 on 18 Jul 2017 to trade $0.440 on 3 Oct 2018. My personal guess is part of the fall may be attributable to

  1. a) Lower, or no earnings growth for some of the healthcare players in FY18F. However, this is likely not the case for SMG, as analysts believe SMG is on track for a minimum 40% growth in FY18F net profit. It is noteworthy that SMG already posted a 70% jump in 1HFY18 net profit;
  2. b) Reduction in the general PE valuations ascribed to the healthcare sector;

So, what caught my attention?

  1. a) Positive chart: SMG is testing its downtrend line established since 26 Jan 2018 (See Chart 1 below). Indicators such as OBV, RSI and MACD are strengthening. ADX has started to rise and last trades 22.6 on 3 Oct …