$SNDK chart analysis

 

$SNDK charts and analysis by Stockguy22
 
Someone asked about this chart on twitter
 
@blkthght06 so thought to post my thoughts on it & key levels –
 
I've traded this one before & as you can see its been a nice slow /steady mover till the drop Jan.20th & again last Friday (Jan 28th)
but even prior to that the stock had topped out towards $53.60's & had trouble recovering back over the 20day sma
($50.69 – $51+ area) That's why i like to use the 20day as a good support/resistance off key levels
 
Stop would have to be no lower then $46 or you could use yesterday's low for a stop out point– then relook it at it for support towards the $43 area which is the 200day sma $43.13
 
As you can see on the chart  below , we came off the lower levels from yest. if can get over $47 its a good risk reward to $50-.$51 then higher up to $53+ but initially if pops to 20day lock up 1/2 profits in case fails to break that point like it did last Thursday/Friday
 
The day it dropped the 20day (Jan 20th ) was a change in total direction on $SNDK prior to that day we had nice strength above the 20day sma (as you can see from the blue arrows)
 
initially the tweezer bottom candlestick formation on  Jan25th & 26th gave a great buy signal for $SNDK but then failed to break back over the 20day sma (but was a good trade to that area)
 
20sma ( means the 20day simple moving average) some people use ema ( which means exponential moving average which works ok too) I've been using sma for a long time and find it works well for me. So whether you use moving average crossovers or the 20sma, 50sma, 200sma or ema's its not as important as understanding how those play out with the charts you are looking at. Once you find patterns that are working for you continue to use them , once they stop working test different techniques ( don't become complacent) 
Also don't rely on just one indicator , as you can see on the chart I also look to candlestick formations , volumes , prices etc. which can help you make a better buy/sell decision.
Let a bunch of indicators tell you the story , not just one since you'll get into trouble just focusing on just stochastics, or candlestick formations or moving averages.
 
In conclusion not a bad risk/reward but at this point – Over the 20day sma would trigger a new buy signal where you'd take a long position with a close/stop under the 20day sma & try to target back towards the highs of $53.60's again 
 

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Hope this analysis helps
 
Stockguy22
 
Again double click the chart  to see the chart bigger or will be harder to read. Or right click & open it in a new window or tab
Feel free to print it out if you find it helpful 
 
 
 
 
More info on which is better sma or ema ? ( simple moving averages vs. exponential moving averages)
 

“A simple moving average is formed by computing the average (mean) price of a security over a specified number of periods.

Exponential Moving Averages reduce the lag by applying more weight to recent prices relative to older prices.  In order to reduce the lag in simple moving averages, technicians often use EMAs.

The initial thought for some is that greater sensitivity and quicker signals are bound to be beneficial. This is not always true and brings up a great dilemma for the technical analyst: the trade off between sensitivity and reliability.

All moving averages are lagging indicators and will always be “behind” the price.  When prices are trending, moving averages work well. However, when prices are not trending, moving averages can give misleading signals.

 

 

Posted in Commentary, Stocks, Watchlist