This week, Hi-P has caught my attention with its 33% surge from the intra-day low of $1.13 on 7 Oct 2019 to trade to an intra-day high of $1.50 on 29 Oct 2019. In addition, it has risen 12 out the past 15 trading days with RSI touching a recent high of 81.8 on 25 Oct 2019.

Based on Hi-P’s chart, it seems to present a favourable risk to reward short trade. Please see the basis and more importantly, the risks.

 

Basis

a) Hi-P trades above the higher analyst target price $1.32

Average analyst target price for Hi-P is around $1.27. Two analysts cover Hi-P with DBS having a higher target price at $1.32. (Maybank: $1.21). I.e. on a simplistic level, this may mean that the stock is overvalued.

Figure 1: Average analyst target price $1.27

Source: Bloomberg 29 Oct 2019

b) Candle stick forms a doji, followed