Alphawave share price opened higher on Tuesday, rising by 4.6% at the time of writing to trade at GBX 112.8. That helped recover some of the losses incurred on Monday when the stock dropped sharply by -13.7% on the heels of weak earnings results.
Alphawave (LSE: AWE) has had a rough time at the LSE this year, with its year-to-date returns at -13%. Furthermore, bearish control has strengthened in recent days, resulting in monthly losses of -23% and -16% dip in the last five trading sessions. Fresh from the largest single-day loss year-to-date, Alphawave share price trades below the 20,50 and 200 SMA levels.
The company reported first-half earnings of $90.98 million, down from $187.2 million for the corresponding half last year. Furthermore, Alphawave downgraded its guidance for the full-year earnings, from the $345 million-$365 million band to $310 million-$330 million. It largely attributes its earnings decline to the impact of a merger between two key customers in South Korea.
On the brighter side, the company expects its years of R&D in high-quality AI-chip designs to start converting into revenue in the second half of the year. Also, the company has started diversifying its market, with only 20% of revenue coming from China in H1, down from 66% last year. This could cushion it from the downside of risks in a single market and raise earnings significantly.
Alphawave share price has a bullish momentum as seen on the Money Flow Index (MFI). That will likely support further gains if the price action stays above the pivot mark at GBX 107.6. With the buyers in control, the upward momentum will likely meet a barrier at GBX 113. 6. However, a stronger bullish momentum could break above that mark and test GBX 120.0.
On the other hand, moving below GBX 107.6 will indicate bearish control. In that case, the first support could come at GBX 100.2. However, if the sellers extend their control, the downside momentum could be strengthened to break below that mark and invalidate the upside narrative. Meanwhile, the price could move lower to test GBX 94.9.
This post was last modified on Sep 24, 2024, 10:43 BST 10:43