Kogan Share Price Falls on Business Update (ASX:KGN)

At time of writing the Kogan.com Ltd [ASX:KGN] share price trades at $18.88 down 3.97%.

Kogan.com showed incredible growth throughout 2020, is it starting to run out of steam?

ASX KGN Share Price Chart 1

Source: Optuma

The rise of Kogan

2020 was an amazing year for many reasons. The global pandemic changed everything.

Causing lockdowns and stay at home orders across the globe.

The knock-on effect became a lot of people at home shopping.

For Kogan, the expansion of online shoppers saw their share price shoot up along with their revenue.

The company recently announced an update and reported outstanding growth.

1HFY21 highlights across the Kogan Group include:

  • Gross sales grew by more than 96%
  • Gross profit grew by more than 120%
  • Adjusted EBITDA2 grew by more than 175%
  • EBITDA grew by more than 140%
  • Cash at period end was AU$78.9M with AU$1.4M of the Group’s debt facility three drawn within Mighty Ape
  • Active customers was 3,003,000 for Kogan.com and 719,000 for Mighty Ape
  • The business had its first $30M+ week

ASX Kogan Share Price Chart 2

Source: Optuma

Throughout the odd year that was 2020, KGN have been able to capitalise on the chaos.

With the Kogan share price rising more than 447% to where it trades at time of writing.

Is it time for Kogan to fall?

In October 2020, KGN reached an all-time high price of $25.57 before falling away into the low at the end of November 2020.

From the low the share price moved up to $21.70 or 61.8% of the prior range with the move up taking place on declining volume.

ASX KGN Share Price Chart 3

Source: Optuma

Both the move down (red line) and the move up (green line) may be countertrend moves.

For Kogan to be considered bullish still, the price would have to break the all-time high of $25.57.

Should the price fall below $15.54 and create a newer low, then Kogan could be considered to be bearish.

Nothing goes up forever and while KGN had a fantastic 2020, at some point the share price needs to come down, which we may be seeing the start of now.

For those that made a good profit trading Kogan this past year, it may be time to sit tight and wait for the next rally.

Those still holding positions — monitor the next couple of weeks closely and look for the indications of the share price being bullish or bearish and react accordingly.

Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here.


Carl Wittkopp

For Money Morning

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

Money Morning Australia