Why did Toshiba shares crash 16% on reports that the embattled Japanese conglomerate faces bigger losses at its US nuclear power business?
Why did Toshiba shares crash?
It is dreaded that Toshiba corporation may have to write down the value of the unit by a larger than anticipated 700bn yen ($6.1bn; £5bn). There are unofficial reports that Toshiba is seeking aid from the government Development Bank of Japan. Toshiba said the exact figures was not confirmed and failed to comment on DBJ approach. Toshiba is facing huge cost overruns on projects held by a new company that builds US nuclear power plants. Toshiba's US operation Westinghouse invested about $229m in 2015 for Stone & Webster.
Also, Hiroshige Seko, minister for economy, trade and industry quoted that:
''The rescue plan for embattled conglomerate Toshiba Corp was not under consideration at his ministry. Also, he would closely monitor the steps taken by Toshiba's management.''
Toshiba corp. Technical analysis
The Toshiba share price closes below its weekly S3 support level of 251.8 points thus the share is highly bearish in coming months. Furthermore, The simple moving average for a period of MA200, MA100, MA50 and MA20 is 394.5, 330.8, 292.7 and 362.1 respectively. All the moving average gives ‘SELL’ signal. Furthermore, the Fibonacci support and resistance levels are S3 251.8, S2 266.9, S1 277.0 and R1 302.2, R2 317.3, R3 327.4. All the indicators display ‘SELL’ signal and the stock is highly bearish.
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