SM1 Weekly To 19 Feb 2018

Short Term Trade – ASX: SM1

Synlait Milk Limited (SM1) is a company I have only come to learn of in recent weeks. 
Synlait is an ‘innovative dairy processing company’.

The business is profitable, has minimal debt, reported negative cash flow in 2017 albeit they are a growing company and they appear to have bright prospects for the future.

As soon as I saw the chart, I immediately observed a text book Wave 4 Elliott Wave pattern coming to an end.  Elliott Wave Theory states that stock prices move up in a 5 wave pattern and down in a 3 wave pattern.  I follow some great Elliott Wave technicians and also some ‘Wavers’ that occasionally run out of fingers.

Also, another technical pattern, a ‘Wyckhoff’ spring seems to have been put in which has increased the probability of good things happening for the share price in the short term. 
I have a basic knowledge of Wyckhoff but price clearly stopped out a few traders on the downside before rebounding to the upside.

The company completed its financial half-year on 31 January and has announced it will report their half-yearly results on March 19.  I purchased shares at an average of $6.33 on Friday 16 Feb and am looking for a run up in the share price into the results announcement.

Will see if the price does run up???

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