ShengdaTech: Smallcap Opportunity

I'm increasingly looking at small cap opportunities in this trendless market, dominated by herd behavior  - much of it computer generated. The hope is we find some companies that are outside the radar and hence not so reliant on hundreds of hedge funds moving in or out of stock en masse for us to profit. Now, the negative with under covered small caps is they can sit... and sit... and sit... for a long time without any movement. And then suddenly surge out of the blue on a catalyst - much like Fuel Systems Solutions (FSYS) has done [Aug 7: Fuel Systems Solutions - Monster Quarter but Impairment Charge will Confuse]. But this many times requires, months/quarters of no "benefit" (price appreciation) from holding the stock. And in a "what have you done for me" world with investors who always want appreciation, that's a tough road to hoe.

With that said, ShengdaTech (SDTH) might be the right company at the right time with the right catalyst to wake up the market to yet another undervalued opportunity that is sitting in purgatory. First, let's look at the most important thing in this market - the chart.