Sunday, October 14, 2012

2 - Follow-Up Analysis on SMRT (141012)

SMRT Daily Chart
* 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
2. EMA 55
3. SMA 35

1. MACD (9, 26, 13)
2. Resistance / Support Line
Ok, lets do a little analysis.
  1. If you take the advice from my previous comment that i gave with regard to MACD. I actually indicated that it could be a bearish divergence. But to my amazement, it went opposite ways and prices climbed. Hence, i would always like to highlight this. "NOTHING IS 100% ACCURATE!" As of now, observe for possible divergence setup.

  1. As mentioned during my first posting,i have actually indicated that  $1.73 and $1.675 to be my possible resistance points. Sad to say, $1.675 was broken immediately and prices rebounded up to my $1.73 resistance point. Resistance managed to kick in and prices are currently staying in $1.71 to $1.74 region. I believe that prices will stay within these ranges for the next few periods, if it does break this resistance area, $1.815 would be my next resistance point (Blue dotted line). If it doesn't break, the next support would be back to $1.675.
 EMA 55 (Orange Line) / SMA 35 (Purple Line)
  1. Currently, the price is very overbought as it is on top of both of the moving averages. Hence, my concern would be that prices would want to travel back to its fair value. So on the safe side i would not conduct a buy trade at this current moment. I would instead observe the moving averages moving direction, currently both are on the upward trend and hence my fair value is increasing as well. Once the moving average and price are near or touching each other, a rebound might be possible. If you look at the previous periods (Green circles), prices touched the moving averages (Fair value) and rebounded up.
My "Conclusion"
No change to my previous post, I would say that SMRT is still 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.
For short term investors, its quite difficult to pinpoint where prices might go, but i still believe that its overbought and the possibility of it retracing back to fair value is quite possible.
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.