Dear Friends and Respected Members:-
I thank you once again for your comments and welcome them since it will help us to understand and study condition of a stock well. So friends let us work on SMDC today well there are lot of questions in my mind regarding this stock haha.
Both bullls and bears in this stock seems to be in a confused state, where both of them dont know what to do haha, Thats why I thought of looking into long-term (monthly ) charts for better signals and opportunities. Well here is my set of observation followed by conclusion
1. I believe that the stock made an inverted H & S pattern which was backed by volumes with conservative price objective of ~ PHP 6.00, however stock already made a new life time high of PHP 5.60 on Monday but bears managed to overpower bulls and dragged the stock below PHP 5 level creating body with long upper shadow suggesting bearishness in this downward pulls bears created a minor downgap of 0.05 points at PHP 4.95.RSI on daily charts have started to cool off suggesting short-term weakness.
2. Weekly charts clearly show that level of PHP 5.0 acted as a strong resistance in past (June and Early July 2007), however bulls attempt of piercing this supply zone last week with exceptionally high volumes cannot be ignored though unfortunately the stock was pushed back in red this week. Momentum indicator RSI in overstreched state, however the indicator too showed positive breakout from inverted H & S pattern in Nov - Dec 2008.
3. On monthly charts, the stock price seems to be moving in an Ascending Scallop pattern since 2005 suggesting long term bullishness, however a massive negative divergence of momentum indicator with the stock price cannot be ruled out.
Conclusion:- I believe that there could be short to medium-term weakness in the stock price and bears might pull the stock down towards PHP 4.00 where the stock could find support due to multiple demand points lying at 50-dma and 20-wma placed at ~ 4.07 and 3.98 respectively break below which with volumes might push the stock further to re-test crucial supports of 200-dma and/or 50-wma placed at ~ 3.51 and 3.38 respectively. Major bearish divergence on long-term charts shouldnt be forgotten. I suggest deploying cash only on dips and booking profit on higher level in short to medium-term, one should avoid carrying positions for longer term since is giving mixed signals so it would be better to avoid it for long term and invest funds in other opportunities with favorable risk reward ratio.