Murder in the Outback - smashed ratings, page-10

Anything is possible anup. Maybe a little early to call 7c area. Swm last recent short term low in this range was was 9c on 29/6.

Today it failed that support. But going back a bit more to 29/5, 9c was bottom, swm broke out on that 9c low and moved to 17c quickly.

But if we go back earlier , 8c is a strong support from 18/5, 21/5, 22/5, 25/5. Swm traded around there for a week, before moving to 9c on 26/5 to 29/5 mentioned above before moving up.

So 8c to 9c is a strong recent support area for rebound.

It to me is still in down trend due to volume as bellow,

6/7, up, 8.9m
7/7, down, 19.6m
8/7, down, 8.8m
9/7, up, 4.4m
10/7, down, 11.8m
13/7, up, 7m
14/7, down, 12.5m

For swm to rise, up days need higher vol than down days. As seen above, down days have twice the volume as up.

So swm will continue to trade sideways or down till we get volume to drive up.

That will not happen without any guidance. That is the problem.

Also a problem is 20m equity with 400m or so debt. There Gearing is dangerous. Any losses on asset sales could put swm into negative equity.

So it's not just a matter of selling assets, but making sure they sell them above book value.

If they did go negative equity, they will need a cap raise, or depending on clauses, the bank might be knocking on the door.

All these things mean swm will remain friendless until results come out next month.

Even with the afl deal, I think the market was after more because swm hit 17c the day it was announced, but reversed trend after it.

Mr stokes has a canny knack of pulling of deals, so I am myself not fussed about the low equity, guidance etc.

If it was someone else running it, I certainly would be worried.

Swm needs to hold 9c area, or it will fall to 8c, if it holds here, it should head towards 10c, but there is a road block at 11c.

Key is volume, not price, swm needs higher vol on up days. If that occurs volume momentum changed to drive up.