Sunday, September 23, 2012

Analysis on SMRT (210912)

I apologize for the tiny words being presented in my daily chart of SMRT (S53). The setup for the indicators which i normally used for technical analysis are as follows:

* These indicators and tools are based on my preferences and within my comfort zone. For reasons on why i chosen them, you can view my later blog posts. But i do encourage fellow traders to have their own indicators. Indicators that are "close to their heart". Books can only give you this much, at the end of the day, trading decisions will still have to be made by you. Hence, "YOU" are the weakest link.

Chart Set up
1. Daily Chart (Courtesy of Chart Nexus)

Moving Averages
1. EMA 200
2. EMA 55
3. SMA 35

1. MACD (9, 26, 13)
2. Resistance / Support Line

Ok, lets do a little analysis.

Resistance areas

1. If you looked at my chart, i have actually drew a blue line stretching from the top to the next lowest high. (Which is around April). Apparently, our current price is very near to our resistance point. Hence i would be cautious on buying as that could be a possible resistance area.

2. Secondly, i also plotted 2 dotted lines, prices at $1.73 and $1.675. They used to be support lines for quite a long period. But since they were broken a while back, i have actually treated them as resistance areas. If you look at the current price,  $1.675 has proven to be a resistance area for few weeks now. Hence buyers beware.

Ok, so far so good for the general outlook, lets zoom into the chart to analyze further with the use of the rest of the indicators. I have provided a chart that is maximized to the period of 2012.

1. If you look closely at the red arrows. What do you see?? Bearish divergence?? (For information on bearish divergence, please look at my other blog postings). Prices are going higher, but MACD is going lower. Again, my advice would be "Buyers beware"

EMA 55 (Purple Line) / SMA 35 (Orange Line)
1. I used this moving average as an indication of whether the prices are overbought or oversold. Currently, the price is slightly overbought as it is on top of both of the moving averages. And price could be trading towards its fair value (The space between EMA 55 and SMA 35). Also SMA 35 is traveling above EMA 55, hence slightly bullish. But do look out when it crosses the EMA 55 line. Price may turn opposite way.. Which is for this case, possible back to fair value

EMA 200 (Pink Line)
1. Another moving average which i refer to frequently, currently the price is trading along the EMA 200 line as well! Resistance or Support? Well, have to wait and see...

My "Conclusion"
Well, for the long term. I would say that SMRT is a good investment. Downside is that you may witness some fluctuations in price overtime. If you are a long tern trader, i don't think such price movement would affect you. Plus, they do give good dividends although much lesser compared to the previous round.Hopefully, there would be another one in November. :)

For short term investors, i would advice to observe. The "mini" uptrend from June till now may be slowing down..If you were to conduct impulse trading, trade at your own risk.

I will be posting SMRT price movement in the next few days to see whether my analysis are accurate. So do stay tune for the next post! 

Lastly, i would like that everyone to share your thoughts. Because we are all here to learn and exchange ideas. I may have left out something which might prove crucial or there are some other indicators which may be better for the analysis. So please share!
Whatever i present here is and still is based on my analysis. It does not constitute the setup of a trade. You will have to come up with your own analysis to back your own findings. Heck, i may even be wrong too. But i always manage my risk.

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