Sunningdale Tech – good momentum with good volume

I have been avoiding over-value STI index component stocks and just investing in penny stocks with short term momentum. Sunning Tech has been active with good volume recently and expect the company to turn into black pending for the last quarter financial report announcement.

Using Standard Six Technical Analysis Method to analyse the stock momentum.

  • MACD – still bullish converge (bullish)
  • Parabolic SAR – Stock price on top (bullish)
  • Boilinger Band – at upper band (bullish)
  • Moving Average (MA) – stock price above 20D, 50D, 200D MA lines.
  • RSI – around 60 (less bullish)
  • Stochastic – going to hit 80% (bullish)
The support level at $0.10 and $0.12. I think the downside possibility is minimal for a few reasons:

  • The worst crisis has gone. Economy seems to have bottomed up and the fear factors are no longer there.
  • The company expect to make profit again after in the red for so many quarters.
  • The NAV (Net Asset Value) is $0.33. Current stock price is only $0.135 which is way below $0.33. (Layman term: if the company goes bankrupt and liquidated, you can get back $0.33 per share)
  • The company is still generating positive cashflow base on Q109 financial result.
  • Current Ratio is 1.2. Short term will not have any liquidity issue (layman term: the company will not go bankrupt)

WORST CASE: If all my Technical Analysis are wrong, I just keep the stock and wait for the price to go back to the fair value. I still be able to make money if I can hold the stock long enough.

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