zen_machine...
Another great read!
We have some interesting market dynamics coming up.
As I see it, the market will be split into those who believe CAZ will win, those who believe they wont, those who (due to corporate issues) will need to hedge their bets...and those who don't care either way, but will follow the money-flow.
Lets take a closer look at the psychology of the various groups likely to effect the near-term trading in CAZ...
Those who think CAZ don’t stand a chance…
Interestingly, this group will actually have very little impact on things...by virtue of the simple fact they wont be buying shares!
Those who think CAZ will win…
Believers in the situation, or at least those prepared to risk some capital just in case, will be buying with a view to holding on for the ride…the result here is that shares will be bought and not sold, thereby further reducing the number of shares available on market. As the price rises higher and higher however, some will no doubt be prepared to let a few shares go.
Those who will move on corporate grounds…
I put RIO, BHP, FMG and perhaps a few others in this category. For all sorts of reasons, many of which may still remain unforeseen, various corporate strategies may involve the need for exposure to CAZ shares…being so few shares readily available on market, this poses some real problems and could result in some pretty high prices being paid to guarantee shares. We could find ourselves facing a situation where any short-term inherent "value" for CAZ becomes irrelevant in the event of a strategic grab for shares. Once again however, this involves taking stock off the market.
The money followers (traders) who don’t care either way…
Being the tarts they are, this group will buy or sell at any level…just as long as it is in the direction the shares are trading. Responsible for liquidity, they will also be largely to blame for the daily volatility near-term.
As I see it, we have the perfect recipe here for a major rise…and by major, I’m talking 100%+…or in other words, $3+ near term (2-3 weeks...or...2-3 days?).
Depending on how things pan out over the coming weeks, any signs of a successful outcome for CAZ should see some major buying activity.
It is going to be a fascinating period ahead…bring it on!
Cheers!
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