buy recommendation., page-49

Dear KingVox,

Could be a good call by yourself to get in at these levels. The short term is negative but can it go much lower?

For 3 weeks the price has stabilised. In the preceeding 4 months the price has dropped from $1.875 to $0.75! Amazing stuff seeing the AUD has gone down which offsets some IO price fall.

In any event I was looking at the chart because pure fundamentals currently aren't doing the job and I wanted to examine the content of your post. I wanted to try and work out where the bottom is, a dangerous task, but worth undertaking. The answer is I don't know, there is a strong negative sentiment which is difficult to ignore even accepting the company is not a dog. The price action is running the show, that is all I know. So I thought I would put together some information to assess what is what for myself and anyone else who might be interested to work it out as I am trying to do!

I am not a great chartist but charting has its role, and when fundamentals aren't ruling the sentiment roost, the price action is. So that is where I have turned and I also rely on other information providers to try and bring together a range of information to to assist me.

The shares seems oversold when you look at the Williams %R indicator below -80 at -88.5, however, when you look at the slow stochastics, ultimate oscillator, and the RSI as absolute figures the shares are neither overbought or oversold. I note for example though that the slow stochastics is heading into the oversold direction.

The MACD is slightly rising and above the signal line but below 0, the 200 day SMA is falling and the price is below it.

When you look at the short sell list of 12 June 2013 the company is up there with a % of shares short sold.

http://www.asx.com.au/data/shortsell.txt

Having written all that it is not all doom and gloom and this is the point about it being difficult to pick the bottom of the price action. I note the saying about ending up with smelly finger! On a fundamental view the company is progressing mine development and production. A rail solution could be close- who knows, it could be a real shot in the arm to cast off the negative sentiment. I think that is what is the yoke around the proverbial shareprice's neck.

The company is cash rich with cash to market capitalisation at 58.2%. Also, the current ratio is 2.4x- a healthy ratio.

Without wanting to go into it all too deeply I think the following is the nub of it- in the last three months the stock has hit a new 52-week low twelve times! The point of that is to show, and I have been guilty of this in the past, that when you think 'it is overdone I will buy', there is a chance the price can go lower. So you buy again, 'this time it must be overdone', this is getting silly 'I will buy again!' You end up like a dog forever chasing it's tail.

One of the great things about HC is learning from those who know and I have learnt a valuable lesson from them being, you don't have to try and pick the lowest price. It is not a competition about picking the bottom, it is about making money. Picking the bottom is a difficult task and fraught with danger, however at these levels the price must be about to reverse! I hope it does for all our sakes.

I have a modest holding and I am suffering a paper loss with it, but there is a massive upside which is why I continue to hold. I don't have the heart to buy more at this point because I have learnt when you think it is oversold, sadly it doesn't always end up being the case!

GLTA