Cricket has a Duckworth-Lewis method of recalculating targets when there is an interruption to play. So complex, sometimes commentators are in a tangle at the end of a match trying to figure out who's going to win. I haven't figured out selling yet, and I liken selling to the
Duckworth-Lewis method. I'll use a few examples.
Buy on weakness, sell on strength. ANW bought recently at 2.9. Drilling results came out a few days later and the SP moved up a little bit on high volume to 3.6, but then started to limp backwards. This was a sign that the smart money was leaving the building. Don't be the dumb one. Five days later it was sitting at two cents.
FGO had a fall recently dropping from 9 cents. Support on the chart looked to be 4.3 so I set my buy order there. Of course the SP turned at 4.4 and I ended up buying in at 5. If you look at the chart, there will be a lot of holders in the 6.5 to 9 cents range waiting to get their money back, and it could be quite hard for the SP to run through all that. This is just a quick trade to 6.5 for me.
Use technicals to help you make selling decisions (you need all the help you can get). FCT bought in at 29. It ran to 40, but I held on expecting it to back test support at 35. When it broke through support, 34 was the sell signal. Try and understand what issues are affecting the market. Couple of tech wrecks were affecting sentiment in the tech sector at the time.
AVZ. If they ever decide they want to mine the damn mega monster, it will require a mega capital raising. Run for the hills.
AVZ sees the start of a chess game getting played out. You might have to think on your feet. I bought in at 21 cents. At a mega Market Cap I felt there might only be a bag or two in it. They had enough money for the first stage, being a 20,000m drilling campaign. After struggling to get the drill rigs on site at a remote location, all of a sudden they raise enough money to finish the full 40,000m campaign. There may be a takeover or joint venture offer come along well before drilling is completed. The longer they leave it, the higher the price is likely to be. There may be a bidding war for this monster. Chinese versus ??? Don't have any preconceived locked in plans regarding selling for this one. Think of it as a game of chess.
If you have a strategy, execute it. My strategy has become to invest in high conviction stocks. AGY has some forthcoming risk which saw it drop to a medium conviction play in my mind. Sell. Execute.
Keep in mind there are some psychological barriers that can be hard to break through, such as ten cents, or one dollar. 4CE's current attempt to get through 10 cents comes to mind.
Are you in something for the short term or the long term? What is your strategy in a stock? LTR came out with their first results for Buldania, which were a bit disappointing. SP dropped from low 4's to low 3's. There are plenty more targets to come, however, plus they have a vanadium resource. Understand the fundamentals of what you are investing in, and decide
beforehand if you are going to ride the bumps out, or whether you are going bail at the first sign of trouble.
Volume ... Volume, volume, volume. Never forget it's importance in whatever decision you are making.
Selling is far harder than buying in this game. By the way, what is the name of this game we're playing?
I call it humble pie ... not bravado.
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