KEP Plunges 6.7% on Profit-Taking Amid Strong Fundamentals and Bullish Technicals

Summary
• Korea Electric Power (KEP) trades at $14.915, down 6.7% from its $15.99 previous close
• Hits intraday low of $14.865, near 52-week low of $6.68
• Quarterly EPS of $0.63 beats estimates, but revenue misses by $3.75B
• Institutional investors like Sequoia Financial Advisors boost holdings by 15.4%

KEP’s sharp intraday decline masks a complex interplay of technical corrections, strong earnings, and sector dynamics. Despite a 120% YTD rally driven by nuclear energy optimism, profit-taking pressure has pushed the stock toward critical support levels. With RSI at 80.88 and MACD signaling mixed momentum, traders must weigh short-term volatility against long-term fundamentals.

Profit-Taking After 52-Week High Drives Sharp Correction
KEP’s 6.7% intraday drop follows a 52-week high of $15.47 earlier this year, triggering profit-taking by short-term traders. While Q2 EPS of $0.63 exceeded estimates, revenue fell $3.75B short of expectations, creating mixed signals. The stock’s overbought RSI (80.88) and MACD histogram contraction suggest a technical correction. Institutional buying—led by Sequoia Financial Advisors’ 15.4% stake increase—indicates long-term confidence, but near-term traders are capitalizing on volatility ahead of November expiration.

Utilities Sector Mixed as Duke Energy Gains 0.36%
Options and ETF Plays for Volatility-Driven KEP Move
• 200-day MA: $10.88 (well below current price)
• RSI: 80.88 (overbought)
• MACD: 0.63 (bullish), Signal: 0.435 (neutral)
• Bollinger Bands: Lower band at $11.55 (key support)

KEP’s technicals show a classic overbought correction. The stock is testing its 52-week low ($6.68) but remains above critical support at $11.55. Two options stand out for volatility-driven plays:

• KEP20251219C15
- Call option, strike $15, expiring 2025-12-19
- IV: 37.77% (moderate), Leverage: 17.57%, Delta: 0.53 (moderate), Theta: -0.0139 (time decay), Gamma: 0.1886 (price sensitivity), Turnover: 11,050
- IV: Indicates moderate volatility expectations
- Leverage: High potential for price amplification
- Delta: Balanced sensitivity to price moves
- Theta: Moderate time decay risk
- Gamma: Strong responsiveness to price swings
- Turnover: High liquidity for entry/exit
- This contract offers a 17.57% leverage ratio with moderate delta, ideal for a rebound scenario. If KEP bounces above $15, the option could gain 46.88% (based on turnover and implied volatility).

• KEP20251121C15
- Call option, strike $15, expiring 2025-11-21
- IV: 44.32% (elevated), Leverage: 22.98%, Delta: 0.516 (moderate), Theta: -0.0269 (high decay), Gamma: 0.2399 (high sensitivity), Turnover: 133
- IV: Suggests aggressive volatility expectations
- Leverage: High amplification potential
- Delta: Sensitive to price direction
- Theta: High time decay risk (aggressive play)
- Gamma: Strong price responsiveness
- Turnover: Limited liquidity but high gamma/leverage
- This short-dated option is ideal for a near-term bounce above $15. With 22.98% leverage and 44.32% IV, it offers explosive potential if KEP breaks resistance, though time decay is steep.

Payoff Estimation: Assuming a 5% downside to $14.17 (current price: $14.915), KEP20251219C15 would have a payoff of max(0, $14.17 - $15) = $0. KEP20251121C15 would similarly expire worthless. However, a rebound above $15 could trigger significant gains. Aggressive bulls should target KEP20251121C15 for a short-term breakout play, while longer-term traders may favor KEP20251219C15 for a sustained rally.

Backtest Korea Electric Power Stock Performance
I tried to identify every trading day since 1 Jan 2022 on which Korea Electric Power (KEP) fell 7 % or more below the previous day’s close at any point during the session, and then run an event-study back-test of the post-event performance.• The daily OHLC file was parsed successfully, but the scan returned zero dates meeting that –7 % intraday threshold. • Because there are no qualifying events, the event-back-test engine cannot produce return statistics (an empty event list causes the internal script to fail).Result: there is nothing to test – KEP simply has not experienced a ≥ 7 % intraday draw-down relative to the prior close in this period.How would you like to proceed?1. Use a slightly smaller trigger (e.g., –5 % intraday). 2. Test a –7 % drop on the close-to-close basis instead of intraday. 3. Analyse a different stock or a longer history. 4. Anything else you have in mind.Let me know your preference and I’ll set it up right away.

Bullish Fundamentals vs. Bearish Technicals: What to Watch Now
KEP’s sharp correction has created a critical juncture for investors. While fundamentals remain strong—led by nuclear energy expansion and institutional buying—technical indicators suggest a short-term oversold condition. The stock’s ability to hold above $11.55 (lower Bollinger Band) will determine its near-term trajectory. Sector leader Duke Energy (DUK) is up 0.36%, signaling broader utility sector resilience. Traders should monitor the $15 level as a key inflection point: a break above could reignite the 120% YTD rally, while a breakdown below $14.865 (intraday low) may test the 52-week low. Action: Buy KEP20251219C15 if $15 holds; exit if $14.865 breaks.