SMDK
Tuesday AH
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Thursday Morning
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Analysis
Smartdisk came of a 5/26 low of 18 and peaked at 26 on Friday, where resistance exists. It settled to 24.5 by Wednesday, then went up to 24-15/16 Thursday. Volume has increased steadily for 2 days; this is considered a good sign of an impending move. Off a March 1st high of 65, this net profitable company carries a P/E of 96, which is not extreme, in relative terms, for a company like this.
>>SmartDisk designs, develops, manufactures and markets digital connectivity products and personal storage systems that allow consumers to easily access and exchange digital data. The company is using its proprietary and patented technologies to capitalize on the growing demand for digital applications and increased usage of the Internet. SmartDisk's investors and partners include Apple, Hitachi, IBM, NEC, SanDisk, SCM Microsystems, Sony, Toshiba and others. For more information, go to www.smartdisk.com.<<
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At the beginning of its earnings run, it traded at 30 and hit 35 on its earnings date. Profitable companies typically trade at 50% of their March highs, which should be 32.5 for this one. Because of resistance, we aim instead for 30.
From a TA perspective, the Bollinger bands have tightened, suggesting a pop imminent. The MACD nears positive; another sign of imminent breakout upwards. The moving average is uphill, nearing a crossover point. The stochastics have just turned positive.
Especially given the volume, Bollinger Bands and stochastics signals, and the recent news, I believe this will move to 30 quickly.
Mental stops at 7% are what I advise in most cases; that would be 23.25 for this, to protect against further losses.
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