New HotCopper user and UNT holder here. I have been on the sidelines watching the action over the last month and after buying a parcel earlier in the week, I took a larger position yesterday and added to it today, trying to capitalise on the capital structure arbitrage that is going on. Essentially as long as there is a price difference between placement shares and market price, arbitrage will occur, which we expect in an efficient market. At the same time as the selling at a premium, buying at the lows will occur, and it makes perfect sense (sell at 3.6c and make 10% (ignoring overheads) and then roll that 10% back into the asset when it approaches the placement price of 3.3c as well as adding to your position).
These plays are short term in my view, as supply will likely dry up at these levels when selling becomes exhausted. Demand seems consistent (decent volumes being traded at VWAP of 3.8c-4c for a couple of days from memory) and we have price catalysts in the near term, in a sector/theme with very little presence in the ASX. Further adding to the sell pressure is that there may be longer term holders and profit takers that bought the lows in January that may just want to get out, so shares are just changing hands, nothing wrong with that.
Volume and Accumulation
Average Volume for UNT is:18M (30 day average) 9M (60 day average)
Here is a small table of the VWAP and volume since the selloff on the 23rd of Feb. I think these figures are less distorted by the rally that preceded it and the selloff itself | Date | VAP | Volume | Volume
(% 30d average) |
|---|
| 1 | 02/03/2023 | 3.46 | *28M | *138% |
|---|
| 2 | 01/03/2023 | 3.63 | 35M | 194% |
|---|
| 3 | 28/02/2023 | 3.83 | 85M | 472% |
|---|
| 4 | 27/02/2023 | 3.83 | 55M | 305% |
|---|
| 5 | 24/02/2023 | 3.7 | 81M | 450% |
|---|
*as of 1330 AEST
So volume is still substantially above the average, despite being stuck in a range.
Lets look at the On Balance Volume (OBV) as well as the Accumulation & Distribution
We can see here that during the downtrend between Feb 14-21, the OBV stalls somewhat. This is typical of accumulation.
We also see that Accumulation/Distribution increases during the selloff, which is a divergence typical of accumulation.
Now the recent selloff on the 22nd/23rd of Feb, which was likely a combination of profit taking from traders trading the rally and placement shares being dumped. Notice that the OBV is choppy but more or less stays where it is. You'll also notice the Accumulation/Distribution increases again to reach the same level as during the peak of the rally, again a divergence suggesting accumulation.
To the current date, Accumulation/Distribution is relatively flat and near the top of the range.
Forward outlook
I will be holding this one, not trading it, as I see excellent growth potential. I see both long holders and swing traders accumulating this one at current prices, as it seems likely to form a base here for the next leg up.. If the demand increases (but not sufficiently for a breakout) somewhat we may see more movement within the range, which may attract some range trading - but this becomes harder as support rises and the range narrows, which is my view for the next few months. Shorter term traders (intraday and scalpers) are likely waiting for the momentum and breakout of the channel.
I just wanted to shed some light on what I am looking at and hopefully it is of some use to people. I had no idea which forum to post this in as there are so many, and this one seemed the most active.
This is just my opinion and view of things at this time, not financial advice.
