Ann: Trading Halt-SYR.AX, page-168

Sharing some thoughts below. I’ll update my last comment’s points and then add some further words on today’s news. Longish comment and feel free to ignore if you don’t like long comments

1/ Key levels

2; 2.24; 2.39/2.44/2.5; 2.64; around 2.8; 3; 3.2 (3.15 and 3.25); 3.45 to 3.53; 3.65; 4; 4.5; 4.72

Above are key levels of share price which I had mostly identified in 2016 itself

My last comment was on Sep 10 and price had fallen to 2.25 - what I had earlier called judgment day scenario, one of the most important inflection points.

A quick note of price movements since then shows a maximum close of 2.39 (one of my key levels) on Sep 24. Highest intra day high was 2.445 on Sep 25, 2.44 on Sep 24, 2.39 on Sep 14, 2.39 on Sep 13.

We can clearly see the key levels of 2.39 and 2.44 that I had mentioned posing resistance.

2/ Shorter level

Shorter level as % has gone down from around 20% to around 16-17%
https://www.shortman.com.au/stock?q=syr

A quick look at shortman shows that shorts are still around 56 million whereas it used to be around 62-63 million since long. Shortman has updated issued capital from 297 million to 339 million on Sep 11. You will see % of capital shorted fall from 19.96% on Sep 10 to 16.22% on Sep 11.

So although there has been some reduction of shorts (probably due to lower price at which they could cover), main change in % of capital shorted is simply due to addional shares issued IMHO.

Incidentally shorts also introduced close to 1.9 million (marked in red on shortman) on Sep 27.

As I’ve mentioned before shorter related risk is magnified here if shorters decide to aim for a high volume takedown of old supports, to cover their shorts.

I’ve seen many comments still as to how retail shareholders can fight the shorters and I continue to say what I’ve always said that shorters have never been under pressure, etc. and that the average retail shareholder has no chance trying to “fight” the shorters. IMHO, it can be suicidal for the average retail shareholder to try to “defend” the share price but good luck if it works out.

3/ Support below 2.24 multi year low

Although previous bottom last year was 2.24, I mentioned that I would be still be comfortable with falls up to 2$

My comment was partially right and we see that even though 2.24 support was broken last month, recent further maximum low has been 2.17 (Sep 27) and other times we’ve come close are 2.21 (Sep 26), 2.21 (Sep 20), 2.22 (Sep 19), 2.19 (Sep 18), 2.23 (Sep 17), 2.23 (Sep 13), 2.22 (Sep 12) and 2.22 (Sep 11).

So, as I rightly thought, there was some support below 2.24 and probably stop losses have been put even below - maybe around $2 IMO.

As I’ve mentioned earlier, I’d be okay with falls of up to $2 but falls beyond that could be dangerous, as old extremely strong support levels would have failed. Many stocks take big hits if this happens.

4/ Bearish channel

I mentioned in last comment that bearish channel from March, that I mentioned sometime back could still play along as SYR might touch bottom trendline – channel line again, offering some positive rise (similar concept to what I explained here on Aug 19). So any decision on “judgment day” and further course of action could still be delayed.

Decision has been clearly delayed till now as SYR has been hovering between 2.2 to 2.4
I tried to quickly draw some lines TODAY and bottom trendline seemed closer to $2, while upper trendline seemed closer to around 2.75 or so. So make whatever of that you might want to, and IMO concerned holders can draw lines themselves to get more accurate levels.

5/ Instos supporting CR

I mentioned in last comment that Issue and quotation of new shares under the offer was Sep 10 and ideally, many instos supporting CR manage to get off at higher price, which could be short term positive if they haven’t sold that day.

As we saw, there was some support for share price over last month. The question on my mind is how many instos still hold their shares NOW. This will be a key determinant for future share price. Keep in mind that even if they’ve offloaded their shares to retail holders around 2.35, they’ve still made gains, and don’t have any incentive to support the share price anymore. So, while this was a “positive” for share price in my Sep 10 comment, this is “neutral” at best, now

6/ Low gains to share price due to SPP

I mentioned on Sep 10 that SPP offer is going to last for a month. Ideally, huge gains are very unlikely as shareholders sell to buy back at cheaper SPP price. We’ve clearly seen over last month as any gains were muted - mostly till 2.39

As can be seen, most of my analysis from Sep 10 has played out, in one way or another

7/ Today’s news on fire

Here is an AFR article on the same also highlighting past issues like damage to processing kit in March, Louisiana residents opposing SYR’s graphite beneficiation plant, terrorism concerns, early shipments of graphite fetching lower prices, etc.
https://www.copyright link/business...anys-mozambique-graphite-mine-20181001-h16409

Important to note that today’s fire news could be the ideal “fuel for the fire” that shorters need.

My earlier point on support till 2$ while valid for last month’s news could become invalid very quickly. One must constantly update one’s analysis to keep up to date with latest newsflow.

Syrah said there had been no injuries from the fire, which had been isolated in a section of the plant that separates different types of material, known as a "primary classifier screen".
At this stage it appears no major structural damage has occurred, however damage to the screen deck, pipe and electrical equipment has been sustained and an assessment of the repair time and the impact on production is being undertaken," Syrah said in a statement to the ASX.

So, clearly, there is at least some repair time and impact on production.

This along with fact that we are close to major inflection points could potentially be a huge issue, if stop losses are hit. I don’t think shorters could have predicted this event but this latest news at first glance could be very positive for them, and just what they need. I obviously don't know how this will turn out but just pointing out that several risks are coming together at the same time now.

8/Final words

Key is to see in coming days how bad the impact is. Important also to note that most production related issues affect companies with at least a minor hit in most cases.
So some issues here are –

1/ How bad the fire impact is – most important point right now obviously.

2/ There is at least some impact of fire so ideally at least some hit to share price

3/ Major inflection points are around the corner -SYR holders should hope that falls get somehow contained within $2

4/ Stop losses would most likely be placed around major inflection points

5/ Shorters level still very high and shorters would be looking for panic among long

6/ Several Commodities stock still in downtrend for most of 2018

First week after lifting of trading halt could be critical to see next range for SYR's share price. Good luck