Technical Analysis of SPCL on 14 Jan 2017

Technical Analysis of SPCL on 14 Jan 2017

This is no buy/sell recommendation - just a trial to see if Technical Analysis (works to an extent) in Dhaka Stock Exchange.

I had never seen such a pattern before – the run of SPCL after its IPO debut. Either it was a Technical pattern (which I didn't know, as different TA trade different patterns) or it was a sign of “manipulation”. That’s why I like to stay away from SPCL.

Of recent, its movement is quite within technical boundaries. Thus, I thought I would try the analysis – no harm in doing a “virtual” analysis.

Fundamental Analysis: Friends of mine who are experts at Fundamental Analysis tell me that it is a very good company. Profit seems good and I like the fact that it gives Cash Dividends. There are growth stories of its subsidiaries too.

From DSE	2014	2015	2016
Profit	471	958	704
EPS		7.20	5.14
Dividend		28% C + 3%B	30% C + 3%B
NOCFPS		1.50	8.20

Current PE is ~ 19.

So now let us look at the Technicals: Weekly chart is not bullish yet.

But daily chart is taking a bullish shape. If it successfully re-tests the downtrend line shown in the first chart, then there could be an up move later (as described for BD Lamps analysis in http://imti77az.blogspot.com/2016/11/technical-analysis-of-bdlamps-on-27-nov.html).

The re-test seems to be around 62% fibo level. Price decrease on low volume in last three days also have bullish implications.

I would wait for it to make an up move (which might also make the weekly chart bullish) on HIGH volume before entering.

It’s for the risk takers. I would set a tight stop loss of around Taka 4 below the entry price.

Let us see what unfolds . . .