Volume Price Analysis

Long $SGYP Day 155 Analysis

From the last game plan it looks like the second scenario might be in play. Good news about raising cash without dilution came out during the week and was received poorly. Like it or not, despite the improving fundamentals, this is trading strictly on technicals at the moment. Therefore, technically, I see no reason to buy this now as I haven’t and won’t until I see some indicators turn positive.

It is my opinion that the retail buying now, because it looks cheap, are about to have bad buyers remorse. For their sake, I hope I’m wrong.

micro analysis

Here is today on the 15 minute chart. Yesterday was the big conference call that everyone was anticipating. I personally didn’t listen because, quite frankly, I don’t care. What I cared about was today and the reaction to it. This tells me all I need to know, not posts on Twitter or StockTwits.

This was a classic take down on news. The MM’s want it lower so they take it down to give the perception the news was bad. This creates fear that the call actually was bad news, when the news probably had very little to do with it at all.

It looks like the smart money sold, or took short positions until around 10 to drive the price down. After, it looks like they covered some of their positions to stop the waterfall. They are trying to control the move down, slow and steady like a Venus Fly Trap.

After they covered and stabilized the price, they left it to retail. You can see how the smart money controls this stock, not fundamentals. They can inject all that volume that moves the price. Once they were out and it was all retail, the volume died and the price just drifted.

macro analysis

Here is today in the context of the last 5 days. More data is shown here than 6 days, but the volume profile only covers that much time. Let’s start 3 days ago with the candle I have noted. If you didn’t know what was up after that day, then I’m not sure what to tell you.

That was the day the news came out about the loan instead of dilution. The concern was that money was running out and another secondary was in play. That was the excuse everyone seemed to be making for the recent drop in price after earnings, and they were probably correct. The announcement of the loan took the chance of a secondary off the table. More money with no dilution should have sent it flying, but by the end of the day it got crushed.

The volume was huge that day and started with a gap up. That gap was abruptly halted as the MM’s took it down, again using news to their advantage. If that news didn’t turn the tide, then it is apparent that smart money is in full control and they want retail out.

I almost got tricked into buying some myself. You can see in that gray circle area that the 5DMA (light blue line) was about to cross the 20DMA (dark blue line). This would have indicated a possible short term reversal of the down move, but no matter how close it came, it never happened.

The next two days were retail days, and retail hasn’t had the power to really move this thing lately. As a result, not much happened. Yesterday was the day that almost tricked me. It was a green day that ended in a decent hammer. It is also the closest it came for the 5DMA to cross the 20DMA, in fact at the close, the cross looked like it would be a sure thing and the hammer would imply a good opening today.

Then there was today. The micro analysis explains today. We closed outside the value zone on the down side. So, next week, will it continue down and make an initiating move to build a new value zone lower, or a responsive move and go back to the POC of this week around $3.00?

The acc/dist line (light blue) in the volume are is in sync with the downward price action, which signifies selling or shorting by smart money. The longer term 50DMA (light red dashed line) is gaining momentum as it moves down faster and stays well below the 200DMA (dark red dashed line).

global analysis

Here is the weekly. Let’s start with the orange dashed line. I mentioned last time that being the possible neckline of a head and shoulders. I can’t say it is with 100% certainty, but if it is, it was broken today. That wouldn’t be good.

The 5DMA is well below the 20DMA and gaining momentum, so the short term trend is decisively down. The price is moving to the resistance of that steep down channel. This week has closed just outside the value zone. I might be inclined to say the price would make a responsive action and quickly move back to the POC, but it has initiated a new lower value zone and any move up to re-enter the previous value zone, above $3.25 or so, stands a good chance of being rejected.

Again, the acc/dist line is in sync with the price decline. For the longer term trend, the 50DMA is above the 200DMA, which is good, but is quickly coming down to potentially cross below the 200DMA, which would be bad.

The volume was heavy this week witch indicated participation by wholesale. Looking at the micro and macro analysis, that is even more evident. I think they are initiating last minute short positions as it heads down to the $2.50 area. That would give them at least another 10% gain.

game plan

The last month or so has been in anticipation of this past week. By my calculations, it was an epic fail! The news was what people wanted, but the price was still rejected.

As much as people may want to believe in fundamentals, they didn’t mean squat these past weeks, and I don’t foresee them meaning anything in the near future. Wholesale owns this stock, and doesn’t want retail in it. They will shake out as much retail as they can, by fear or margin calls, before this sees the light of day.

So, the question is, when does wholesale decide they have enough? Seeing that this is under technical rule, I see not technical reasons to be a buyer here. I expect more downside.

The best bet I see is the $2.50 – $2.30 area. The $2.43 resistance line I’ve plotted has been tested 3 times in the last 3 years. That triple bottom shows strong support. Also, there is a gap at $2.45 all the way back from 2011 that hasn’t been filled. It wouldn’t be surprising to take the price down below $2.43. Since that area is strong support, there will likely be many stops they can pick up below it, fear of another leg lower will cause weak hands to sell and shorts to take more positions. However, I think it would be a false break down, shake out bear trap.

If that does happen, the spring it creates below $2.43 is the time to buy.

 

 

 

 

 

 

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