This company is hostage of shorters.
AGO and MGX has very similar all in costs and receive similar $ for their grades and similar export tonnages.Yet MGX is out performing AGO by leaps and bounds over the last few months.
Whats the big difference??
Well AGO has been targeted by Shortsellers and MGX has not. Its certainly not tracking the Fe price of recent.
Quiet simply in reality shorts can push the share price down by generating sell side pressure (that would otherwise not be there), and lead to exacerbation of falls and rises as they short and cover, and also act as a cap to rises by selling into them if in sufficient volume. The larger the daily volume of shorts the more pressure it causes on the sell side.
In AGO case it is very difficult for a company share price to rise if it is being constantly sold into by short sellers when the short sellers have been near or over 50% of daily volume traded volume. Algorithms are also influenced by traded volume and direction.
Since Thursday (10th July) 14,595,796 shorted of traded volume 21,758,190 (67% of daily volume), Friday (11th July) 6,506,702 shorts traded volume 11,367,895 (57% of daily volume), Monday (14th July) shorts 7,261,284 traded volume 9,735,344 (74.6% of daily volume), Tuesday (15th July) shorts 6,877,854 of traded volume 11,396,915 (60.3% of daily volume), Wednesday (16th July) shorts of 7,755,357 of traded volume 14,539,484 (53.3% of daily volume) , Thursday (17th July) shorts of 6,001,600 of traded volume 13,597,137 (44.1% of daily volume) and Friday (18th July) shorts of 3,599,819 of traded volume 7,648,838 (47.1% of daily volume).
In other words well in excess of 50% of traded volume has been somebody borrowing this stock from somebody and selling it as a short. No other Iron Ore company on the ASX is experiencing that kind of sell side generated pressure.
Fundamentals seem to mean little at this point.
All IMO of course.
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