SMY - Sally Malay Mining

[michael_selway]

TBI
I think that nickel's 20% price decline from its recent highs is a BIG factor.
Although I am a BIG nickel fan, I will not be surprised to see prices dip a heck of a lot further in weeks to come.
Nevertheless, in the longer term expect this kind of volatility as inventories build, and decline, again and again.

Hi Red

do you think at current prices, is zinc or nickel going to do better in the MT?

thx

MS

 

[rederob]

MS
I think that nickel is overstretched, and has been for months now.
Whereas zinc prices are lower now despite inventories making daily record lows.
So the upside is with zinc in my estimation.

 

[CanOz]

I got stopped out of this today as well. But to me it looks like its being accumulated as it falls. What else could explain the increase in price after the open lower?

I'll be watching this for a reversal of the trend.

Cheers,

 

[porkpie324]

I think chart wise SMY could be worth a long pos, look at the volume around $4.00 and the MACD is set to go north from a minus position, I'll be looking at SMY very closely next week. porkpie

 

[smoothsatin]

Guys get your pens out and draw a horizontal channel, we just hit the bottom side, with this increase in volume, this has a very high probability of going north immediately, with a high reward relative to risk (a very tight stop can be set here), will be opening up a long pos tommorrow.....

 

[rederob]

Guys get your pens out and draw a horizontal channel, we just hit the bottom side, with this increase in volume, this has a very high probability of going north immediately, with a high reward relative to risk (a very tight stop can be set here), will be opening up a long pos tommorrow.....

Good luck!!!
I think a safer re-entry is at the lower end of the 30 January high of $3.03 -$3.39 as nickel can fall a long way further yet: $30k is a reasonably good price on historical bases.
I also think your charting skills are either lacking, or you are just very dangerous with a pen.
On a longer term basis a fall into $2 range cannot be discounted - which is still well above support on a 3-year log chart.
I like nickel for the very long term, but I do think that anyone wanting to short SMY could do better than the longs in the near term.

 

[Lachlan6]

Smoothsatin, can see the downward trendline you have drawn. However I would personally not be entering a long position as yet as it still is showing no real sign of reversing and would instead wait for a definent sign. It is though now at an important junction being the 38.2 retracement level from June 06 lows to this year's double top. Furthermore this region coincides with a strong cluster (actually not too dissimilar from the BMN chart), so it may accumulate a bit here before heading higher. However if this level is broken to the downside, it shows the market doesn't like it in the short term and lower levels beckon.

 

[smoothsatin]

Good luck!!!
I think a safer re-entry is at the lower end of the 30 January high of $3.03 -$3.39 as nickel can fall a long way further yet: $30k is a reasonably good price on historical bases.
I also think your charting skills are either lacking, or you are just very dangerous with a pen.
On a longer term basis a fall into $2 range cannot be discounted - which is still well above support on a 3-year log chart.
I like nickel for the very long term, but I do think that anyone wanting to short SMY could do better than the longs in the near term.

Hi,

I was talking about the horizontal lines drawn at 3.9 and 5.5. Both are very significant for this stock.

I am not sure your charting skills are too flash either Rederob? If your long term support is the upward sloping trendline last approached Sept 22 2006, the price has since nearly quadrupled, so i suspect the line is no longer relevent? Anyway, i am not fussed if the price drops back to $2, if support looks like holding up at 3.9 during trading tomorrow, i begin to enter, if it then fails this support level - i will sell, i am looking at trading the stock not marrying it.

 

[rederob]

Hi,

I was talking about the horizontal lines drawn at 3.9 and 5.5. Both are very significant for this stock.

I am not sure your charting skills are too flash either Rederob? If your long term support is the upward sloping trendline last approached Sept 22 2006, the price has since nearly quadrupled, so i suspect the line is no longer relevant? Anyway, i am not fussed if the price drops back to $2, if support looks like holding up at 3.9 during trading tomorrow, i begin to enter, if it then fails this support level - i will sell, i am looking at trading the stock not marrying it.

What is significant is what drives the price of SMY - that's the price of nickel.
You can twist and turn any which way, but presently nickel is both fundamentally and technically weak.
I don't expect that to change until there is a good reason for either to turn, and presently a prayer may not cut it.

On the issue of charting, by all means disregard what is no longer relevant, but a long term trend channel is exactly as it says - long term.
Its relevance is due to the fact that the channel supports itself, often time and again. In SMY's case the chart's support is maintained 5 times and broken twice intraday in around 2 years. Log charts have a tendency to better approximate a company's steady growth and there remains in SMY's case considerable downside given its present position in the upper portion of its channel.
I also compared the 2-year and 3-year regression lines and found that for the 2-year, we are on the money at around $4.
While that's a good sign, the reality is that prices move about the mean: And in this case a downside movement equivalent to its distance on the upside suggests SMY has a chance of dipping below $3.
The 3-year regression lands us around $2.70 at the moment.

 

[nioka]

What is significant is what drives the price of SMY - that's the price of nickel.
You can twist and turn any which way, but presently nickel is both fundamentally and technically weak.
I don't expect that to change until there is a good reason for either to turn, and presently a prayer may not cut it.

On the issue of charting, by all means disregard what is no longer relevant, but a long term trend channel is exactly as it says - long term.
Its relevance is due to the fact that the channel supports itself, often time and again. In SMY's case the chart's support is maintained 5 times and broken twice intraday in around 2 years. Log charts have a tendency to better approximate a company's steady growth and there remains in SMY's case considerable downside given its present position in the upper portion of its channel.
I also compared the 2-year and 3-year regression lines and found that for the 2-year, we are on the money at around $4.
While that's a good sign, the reality is that prices move about the mean: And in this case a downside movement equivalent to its distance on the upside suggests SMY has a chance of dipping below $3.
The 3-year regression lands us around $2.70 at the moment.

You make a mistake in reading a 3 year chart for SMY without taking into account a few other factors.
1. SMY weren't in production 3 years ago.
2. The amount of production which was subjected to price hedging at the start of production.
3. A break down of production in the early production stage.
4. The rates of production.
The chart is only relevant if those factors had been constant.
IMO fundamentals are more important than the charts and charts must always be viewed taking the fundamentals into account.

 

[porkpie324]

Yes I agree Noika allways check the fundementals first SMY is totally different from 3 years ago, SMY is also increasing production, technically they are I believe looking attractive infact I have gone long on 2 CFD contracts today, nothing to big haven't loaded up the truck! BTW have also gone long IGO & MCR, porkpie

 

[Col Lector]

Giddy Porkpie, Mmm going long MCR/IGO/SMY.....What's your reasoning here?? Are you expecting a rebound in Nickel price? see them as oversold? takeover fodder? or that growing production will offset NiP pullback?? All of the above?? More??

 

[porkpie324]

Hi col. I see them as oversold at the mo especially SMY & IGO, so made the decision to start accumalating. If all goes south I take the loss. But all 3 have been great perfomers in the past for me, nothing ventured?porkpie

 

[stockGURU]

Hi col. I see them as oversold at the mo especially SMY & IGO, so made the decision to start accumalating. If all goes south I take the loss. But all 3 have been great perfomers in the past for me, nothing ventured?porkpie

Porkpie, could you please state your reasons for SMY being oversold. Saying it is one thing, but providing some specifics is another.

Would appreciate you explaining your view in more detail here. Thanks!

 

[porkpie324]

OK Guru, I'm obviously in your headlights, all 3 are well run companies with excellant management all paying divs which will probably increase, also all 3 companies are inreasing production and ore resoures, thats the fundementals.
Technically look at some of the previous posts with charts all 3 are similar especially SMY&IGO, so looking at the above I'm going from a completely cashed up position to accumalation.
Of coarse nothing in this world apart death&taxes is certain but I'm prepaired to risk these trades, I could be wrong and be buying to soon, time will tell. porkpie

 

[rederob]

You make a mistake in reading a 3 year chart for SMY without taking into account a few other factors.
1. SMY weren't in production 3 years ago.
2. The amount of production which was subjected to price hedging at the start of production.
3. A break down of production in the early production stage.
4. The rates of production.
The chart is only relevant if those factors had been constant.
IMO fundamentals are more important than the charts and charts must always be viewed taking the fundamentals into account.

1. Mining prestrip began in March 2004 - over 3 years ago and first ore was shipped in September that year. So its a wee bit pedantic to quibble over a few months in relation to a 3-year chart.
However, its not clever to consider the timeframe irrelevant when in fact 12 months after the processing plant was commissioned the stock price had risen only 12 cents. In fact SMY was in the doldrums for a considerable period and after falling below $1 on 12 April 2005, it was not able to break the shackles of $1 again until 28 March 2006.
Were we to extrapolate that trend SMY would still be in the dollar range today.
2. In relation to "hedging", you have again missed the relevance. When SMY hedged 7,000 tonnes in February 2004 (now that would be over 3 years ago!) they got a price of US$10k/tonne. Just in case it escaped your attention, this was some 30% higher than the prevailing spot price: And Spot nickel only breached $10k/tonne in May 2006.
3. Your point about the processing plant (girth gear) breakdown is marginal given only a month was lost.
4. And your point about "production" is not moot as mined output of contained nickel was about 25% greater than reserve estimates in 2004.

So your contention that the fundamentals seem only important when you choose to see them as important.
Presently the fundamentals of nickel - the underlying commodity that drives SMY's price - are not good. Indeed, there are many analysts - folk that have watched the market much longer than me - suggesting that $30k nickel is a high probability given the demand destruction that occurred when nickel prices recently held near the $50k mark.
Given that I am a fundamental analyst by nature, you might like to temper your ardour a little if you misread or misinterpret SMY's past.

 

[Sean K]

Presently the fundamentals of nickel - the underlying commodity that drives SMY's price - are not good. Indeed, there are many analysts - folk that have watched the market much longer than me - suggesting that $30k nickel is a high probability given the demand destruction that occurred when nickel prices recently held near the $50k mark.

I agree things are looking ordinary at the moment for Nickel stocks that ran up with the price and are now going to come back to the mean. I have seen $30K as a long term price as well (in the Fin this weekend) but we need to take one analyst's forecast FWIW. Having said that, they are usually pretty conservative. Events could unfold to change the supply demand mix of course.

General point reading through this thread: there seems to be a bit of emotion hanging on this. Untidy.

Chart wise, this is going down until it makes a higher low and high. That means breaking $4.50 on the way up, for a start. Confirmed break down through $4.00 could send it to $3.15 ish, IMO.

The fundamentals are factored into the chart - long term, and short term. Along with the sentiment.

 

[porkpie324]

Even if nickel does fall to 30k ton and there's opinions on that, SMY on its forecast production will turnover 600 mil per year.
Check the SMY website and read the broker reports they all but one rate SMY a buy, there could just be some end of financial year institution selling here which makes a great accumalation period, as I said I hav'nt loaded up the truck yet and yes this $4.00 level is important, there seems plenty of support just below $4.00.porkpie

 

[porkpie324]

Well looks like my analysis was wrong tried to get in to soon, have closed my pos at a loss, fortunately I went long on JML so have offset my losses a bit, but I'll be watching the nickel for a turnaround.porkpie

 

[Col Lector]

Gidday Porkpie...a bit of pain today...but interesting to note that despite Barclay's capital apparently turning bearish last night citing pig-iron production/lme stock rebuilds/stainless production stalling in Europe.....the Barclay's Group have been accumulating MCR (to 9.26% on 1/6/07) and IGO (to 8% on 23/05/07). Unsure if they are in SMY, but these are significant strategic stakes and selling today doesnt suggest that they are offloading. A big question.....are they buying the dribs & drabs?? MCR & IGO have been touted as key companies in any consolidation of the Kambalda Ni region by commentators on the CSM/Pallinghurst proposal. However...would be a concern if Barclays do dump onto the mkt though
Good move on JML anyway..I've been bullish on these guys for the last month. & CSM holding up despite Zn exposure. Might duplicate this post on the Ni thread...see if anyone biting out there