Lotte Chemical : Catching the falling knife
The listing of Lotte Chemical is really creating most of the Malaysia stock market history record. In fact, I did write and share few of the points on the weeks before the listing. It was one of the least listing in the market, with the first day's stock price closing below the IPO price. The IPO price was RM6.50, and the first day, it close at RM6.38. Then most investors thought that the price may just up down 5 to 10 percent at this level. However, it created another history record when investors see the stock price tumble another 30% to RM4.30 when the company announced worst than expected quarterly report on end of July 2017. That time, few of clients ask my opinion if they could now invest into this stock or not.... I told them technically, it's not advisable to catch the falling knife. However, if the knife already fall on the floor, it's fine to catch it. In other words, one need to wait at least 10 percent for the stock price to recover from the low of