SPC - Likely more near-term correction

- SPC could face more near-term downside pressure following the formation of a bearish engulfing pattern just under the 200-day MA resistance, which could possibly lead to a retest of the resistance-turned-support upper boundary of its 6-month uptrend channel.

- Meanwhile, the RSI and Force Index indicators have displayed bearish divergence to the price action over the last 3 weeks. Coupled with the MACD indicator making bearish crossover yesterday, our view is reinforced that further correction is very likely in the days ahead.

- We expect the correction to find an initial support at around $3.11 (upper boundary of 6-month channel); failure of which could see a test of the subsequent support at $2.92 (minor gap in Oct ’08 and minor trough in early Apr ’09)

- Any immediate resistance is pegged at around $3.49 (2009 high), ahead of $3.81 (minor peak in Oct ’08)

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