July 12 (Bloomberg) -- Mumias Sugar Co., Kenya’s biggest miller of the sweetener, snapped a seven-day rally after a technical signal indicated the stock was poised to fall.
The shares fell 3.6 percent to 6.70 shillings as of 1:27 p.m. in Nairobi. They gained 14 percent in the seven trading days through yesterday.
“What we are seeing is sellers in the market after the stock went up in the past week,” Wycliffe Masinde, an analyst at Nairobi-based Dyer & Blair Investment Bank Ltd. said in a phone interview today.
The company’s 14-day relative strength index closed at 77.7 yesterday, according to data compiled by Bloomberg. A reading above 70 suggests a security is overvalued and will probably fall. Mumias’ RSI has been above 70 since July 9 when it closed at 73.
Year to date the stock has climbed 25 percent, compared with a 26 percent rally for the NSE All Share Index.
Profit for the six months through December increased 6.2 percent to 881.3 million shillings ($10.5 million), the company said Feb. 3. Mumias was rated strong buy in new coverage by Old Mutual Securities, with a 12-month price estimate of 9.87 shillings, the Nairobi-based brokerage said in May.
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