Welcome to the game. Don't get too stressed if people post negatively when you're learning. I'll try and shed some light for you.
Speculative stocks are highly volatile, as information can drive stock prices up 30-40% and sometimes much more, look at EUC and AUZ recently for examples of this. Because of this short-term traders are always jumping in and out of stocks, trying to make money by predicting stocks responses to market releases and information as it becomes available.
When a stock is being revalued or information is coming out or expected to come out. The market tends to drive the price past the fundamental value of the stock.
In the case of MEI recently it shot to around 9c. This is likely people speculatively buying, people that want to invest from a fundamental standpoint getting FOMO and a number of others types of buyers driving the price past where you would reasonably expect it to be.
You have to ask yourself, was this rerate justified? If not, when the next sexy stock comes up and the share price for MEI stabilises you can expect traders to pull their money from the stock and move on to the next stock that promises volatility (opportunity for profit). This results in a pullback in the SP.
There's nothing wrong with the stock they leave, it's just not volatile enough for them to make large short-term profits.
When you're investing from a fundamental standpoint, you're basically punting that the long-term value drivers of the stock are positive, thus positive information will be revealed to the market over time.
In this case, you should see a long-term upwards trend, with prices oscillating around the fundamental value at the time of news release.
Of course, I've simplified everything here and in reality, it is more complex than this. But this is a good starting point for understanding. Long story short, expect fluctuations in the stock price of speculative stocks and buy when you believe it's been oversold - which is almost where I believe MEI is at right now, imo I'd e buying MEI at anything under 7c.
All IMO.
Good luck,
TB
MEI Price at posting:
7.2¢ Sentiment: Buy Disclosure: Not Held
