March 26 (Bloomberg) -- Kit Digital Inc., a maker of online video software, rose the most in more than two months in Czech trading on speculation a record plunge last week was overdone.
The stock increased 6.3 percent to 123.25 koruna at the close in Prague, the biggest jump since Jan. 6, making it the best performer in the 14-member PX index today. Kit’s U.S.- traded shares climbed 5.5 percent to $6.68 by 11:05 a.m. in New York.
Kit slumped 27 percent in Prague on March 23, the most since cross-listing on the Czech bourse in January 2010, and by 22 percent in New York, the biggest drop in four years, after the company said it accepted the resignations of four board members, with three remaining as managers with the company. Kit reaffirmed its earlier earnings outlook for this year.
“The big stock-price reaction was unjustified,” Ondrej Moravansky, an analyst at Cyrrus AS brokerage in Brno, Czech Republic, wrote in a report to clients today. “While personnel changes in the highest posts are clearly important and a negative signal for investors, the company confirmed its outlook and all major members of the management are staying.”
Kit’s plunge on March 23 sent the 14-day relative strength index to 15.7 in Czech trading, a seven-month low. Readings lower than 30 suggest to technical analysts that a security may rise. The RSI rose to 22.1 today in Prague and 24.9 in New York.
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