Synear -- 4th Aug 08

Synear closed $0.445 on 1st Aug 08 recovering from an intra-day low of $0.425. Technically, there are some mixed signals about Synear. RSI has moved up to 30% level and Stochastic signal has cut up and moving towards the 20% level, showing there could be a rebound of the price level with immediate resistance at $0.48 ( 50d EMA level ). However, the MACD indicators are showing flattish performance indicating stock could be at consolidation phase and hence any rebound to $0.48 could be just an oversold rebound. Synear will be releasing its quarterly earning on 6th Aug 08. Market is expecting another weak result due to increasing in raw material costs that eat into its profit margin. A stronger than expected result could propel the price level to re-test the 61.8% Fibonacci retracement level at $0.51/$0.515 in which it has tried to breakout from there twice lately. Looking at the Parabolic SAR indicator, it has just turned into sell and in order to negate that to a buy, the price level would have to rally to around the $0.51 level also. Hence, the $0.51/$0.515 price level is a critical price level for Synear to breakout from a downtrend or consolidation phase. If the breakout is successful, the potential short-term target will be at the 38.2% Fibonacci retracement level of $0.60. On the other hand if the result is worse than expectation, the downside will be to re-test its March low of $0.37. At current price level of $0.445, with upside at $0.60 and downside at $0.37, the reward/risk ratio would be 2.07 ( 0.155/0.075 ). This a rather a very attractive reward/risk ratio if the earning is better than expected.