Stock in focus of the week - SMRT

Periodically,  TCB will pick a stock we may like to trade short term, so this week TCB have picked the stock SMRT to put in *Stock In Focus (SIF)*, please do not take this as a buy signal as our TA reading for these stocks are for sharing purpose only. Do calculate your own risk/Rewards ratio if you decided to trade this counter. 

--SMRT Weekly Chart--

After hitting a high of 0.945 during the week of 15/8, it formed a bearish engulfing candle during the subsequent week which could possibly be a precursor to some consolidation. However, its bullish trend remains intact in view that its uptrend line has not been broken through. Strong resistance is expected at 0.93 generated by the engulfing bear.  A break in 0.93 with volume would consequentially take out its 0.945 resistance and set it off into unchartered territory. For the mid-term, it should have good support at 0.805. A stop loss of 0.785 is recommended for mid-term traders.

                                     

--SMRT Daily Chart--

Due to the sell down on 20/8, SMRT too came under selling pressures and panic selling brought its price down to a low of 0.815. It has now found immediate support at 0.83. The low volume on 22/8 provided a slight hint of sellers exhaustion, subject to further confirmation. As the stock remains bullish, the current consolidation phase offers an opportunity to accumulate for any potential run up in price. If it can successfully take out its resistance at 0.905 with volume, it is expected to challenge its high of 0.945. However, it will encounter strong resistance at 1.00, a psychological barrier, before it moves into unchartered territory with an immediate target price (TP) of 1.04 and subsequently head towards TP2 of 1.18. Recommended stop loss for short term traders is 0.80.


Catalysts:
1.  Its proposed transfer into the Main Board of KLSE with implications for potential fund managers investment and it also implicitly indicates the improving fundamentals of the company over the years.
2.  Its education venture via CUCMS which is one of its key driver of future growth.

Key Notes:

There were share buy backs on 8/8/2014 at prices 0.855 and 0.87 and again on 21/8/2014 at 0.835

(Source: Bursa Malaysia)

Reference for Catalysts and Key Notes:
1. http://www.bursamalaysia.com/market/listed-companies/company-announcements/1710545
2. http://www.thestar.com.my/Business/Business-News/2014/05/10/Education-move-spurs-interest-in-SMRT/
3. http://www.thestar.com.my/Business/Business-News/2014/05/07/Brahmal-emerges-in-SMRT-The-company-has-ventured-into-education-sector/
3. http://www.thestar.com.my/Business/Business-News/2014/07/25/SMRT-buying-rest-of-InFusion/
4. http://www.bursamalaysia.com/market/listed-companies/company-announcements/1716861