oversold v overbought

thedrbill posted,
"......As I posted several days ago, some of my indicators were suggesting that ssm was overbought...."

On the 19th of February I posted SSM 'oversold'. That is still my belief today. In the early part of January 2009, SSM traded at around 75c, I thought at that SSM was good value considering the annual dividend yield of 7.5c for FY 07 & FY 08.

From the early part of January the sp dropped from a high of 82c to around 45c by the end of January. I began to get concerned and fully expected some very bad news was on the horizon.

On 19/02/09 SSM released a profit guidance report and prior to reading it I thought this announcement will be shocking. I couldn't believe my eyes when I read it. The guidance was, IMO, quite positive. While downgrading profit(never a good thing) SSM eluded to the fact it would must likely maintain the 3.5c dividend, same as previous year.

That day the SSM sp that had closed at 44.5c the previous day opened at 40c and dropped like a stone to 23c. At this point I posted SSM 'oversold'. Once I had read the announcement, I considered that SSM sp was too low at 45c, let alone 23c.

Over the next week in the lead up to the half year results ann' many posters cast doubt over SSM paying 3.5c div, and SSM's ability to handle their debt. Some people were convinced that the SSM business was diminishing and felt the sp of 25c would be justified when the next announce was released.

Well, the announcement on 27/02/09 was even better than I expected. The ann stated:
>3.5c div confirmed.
>company had capacity to pay further divs in future.
>debt was under control.
>debt facility had room to move.
>SSM business had grown ever so slightly, but none the less grown in the most difficult 6 month economic period in recent history.
>directors buying.
>long term future contracts.
IMO when the feb 27 ann was released the sp should have gone straight back to 45c. Actually I really think it should have gone back up to 75c as until evidence to the contrary is released SSM pays an annual div of 7.5c.

Since the ann on 27/02/09 trading of SSM shares has been suspicious to say the least. I have not seen any evidence that would justify SSM sp closing at 38c on Xdiv day. Some posters on this thread have tried to justify SSM trading at these low levels, but they have not succeeded as far as I'm concerned.

Personally I will hold as much SSM as I can stand for the next year, 75c or next SSM announcement, which ever comes first.

And I suggest every SSM holder stands their ground in the coming days and weeks. If my TM conspiracy is any where near correct TM will be selling and buying to and from itself today in an attempt manipulate the sp.

IMO do nothing until the sp reaches your personal target or until we have cold hard facts released from SSM management.

The decisions you make and the actions you take are your prerogative, so by all means do what you must, all I say is make informed decisions.

Overbought? I think not! Oversold, IMHO.

All the best to SSM holders on this thread.