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Will SMRT finish the rally and start going down?

SMRT was in an uptrend for the past 3 over month. Before that, it suffered a long term downtrend for 3 over years and dropped to around $1. Many attributed the fast movement of SMRT to the news that SMRT submitted the proposal to sell its hard asset to Singapore government. After a three month movement from 1.02 to 1.65, the uptrend show some weakness and maybe turning weak.

From technical perspective, it can be seen that MACD histogram turned below 0 already and the 2 moving averages (7EMA and 13EMA as my usual settings), indicating that the uptrend is turning weak. On the other side, when STI went up from 3300 to almost 3400 in late July, SMRT did not able to move upwards. On the contrary, SMRT dropped a bit, this is another sign of weakness. If the price drop below the recently support at around 1.56, it is likely to be a confirmation of a mid term downtrend after the stock increase 65% for the past 3 month.

From the fundamental perspective, the recent financial statement released on 30 July indicates that the fundamentals of SMRT hasn’t got substantial improvement so far, revenue is still at the same level and the increase of 0.4 cents in EPS seems does not able to support the share price for futher movement after a 65% rally. Therefore the fundamental of SMRT shows that the price is likely to turn weak.

From both fundament and technical perspective, the price of SMRT is likely to turn weak thereafter and it will be relatively safe to sell it or short sell if the price break down the support mentioned above. Stop loss for the short sell can be set right above the high for the past 8 candles.

Robin Han
Robin Han

Dr. Robin Han, a graduated from NUS with a Ph.D in Department of Chemical and Biomolecular Engineering, has been actively trading in Singapore stock market since 2007. His passion has let Dr. Robin to become a full time trader since 2010. He has extensively share his experience with his fellow investors on trading Singapore stock market using both technical analysis and fundamental analysis.

Dr. Robin is a regular guest speaker for radio 95.8 on financial program. He also has been invited by different companies and societies to conduct educational seminars on stock investments, including Shares Investment, Wealth Directions (Founder: Dennis Ng), Traders Round Table, SIM, Raffles Business International, Online trader's club and Alpha Alliance. He is also contracted by N2N (a listed trading software provider in Malaysia) as their overseas educational speaker in stocks.