Venture Corp - due for pullback; immediate support $6.30, strong support near $6.10

Technically, we believe that shares of Venture Corp (Hold, $6.50) are due for a pullback following its run up from $4.13 since mid-March. The reasons are: 1) Valuation – the stock has gone above our research fair value of $6.50. 2) 1 less incentive to buy post ex-dividend – The stock went XD (dividend 50cts) on 30th April. This means that investors who had held onto the stock through the XD date gets to receive a 50cts dividend payout while those who buy now will miss the dividend payout. 3) Taiwan Exchange Index (TWII) hits resistance – Technically, TWII has hit short-term resistance near 6570 yesterday. A 23.6% downward retracement from here should see the index retreating back to 6030. The TWII is a proxy for Asian technology stocks. If TWII pulls back, technology stocks here could also pause for a breather. Technically, we see shares of Venture Corp retreating to $6.30. If this level breaks, expect strong support near $6.10.

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