Hi,
If you have a look at my recent posts about the buy and sell volume ratio coming back towards a level pegging, and the various reasons I have suggested might be the previous overselling and the re positioning to get set for the next few weeks announcements, the market activity today is as predicted pretty much.
A 42m/47m buy/sell ratio at the moment and a sp around the 2.7c level is perhaps the entering of the second phase re rating of Gondwana following the "multiple factors" a month ago.
To understand the multiple factors it will take some going back through the earlier posts on the growth in value of GDA as it relates to increased exploration activity, rights selling to free carry, new shareholders becoming more aware of the various exploration fronts and the china connection.........add in the many thousands of gold results including the new discovery at west B and the 20% share (free carried interest) in the iron ore at Mount Caudian and potential for expansion in drilling around Mt Caudian, plus the as yet unexplored iron-ore in the north eastern coastal pilbara at wallal downs with a strike target 25km in length, the tenements north of fmg's cloudbreak mine in the central pilbara extending north for 100km ( granite country) and the tenement immediately south of marble bar as well as the moodong well uranium target, it is no surprise that some of the traders are getting set for the news next week or the week after and maybe more the week after etc,.
And what of the data today ?
It has been pretty steady increase and fairly evenly balanced buy /sell ratios emerging, vwap of 2.6c, volume of 15m shares so far, gdaoc up 38% today, gdaoa up 15%, both on low volumes and hardly a seller in sight suggests a move up in the gda share price, or in other words, the owners of options are positive in outlook. This is a good long term indicator for Gondwana in that a decision to invest in options is generally made by more sophisticated investors who understand the higher risk and the higher % returns as well. Remembering all along, that GDA is a spec stock, with under explored assets but a new and over talented and respected ceo in david burton coming onto the leadership team for the increased activity following the successful raising of cash through the rights issue and the additional cash for the company through the exercising of options ( re the 3B notice ) ( more to come I would think as we get closer to the capital reconstructon and the associated bonus shares and free attaching options.) Why has he come on board Gondwana?
This post already too long but can best suggest going through my previous posts and checking the good, the bad and the ugly of the risks and rewards according to your individual risk profile and circumstances.....I said yesterday something about a couple of people perhaps being best to sit on the side lines if they have a low risk profile and even though they may in hindsight have wished they had have bought in yesterday at the bargain basement prices, caution is always the best policy if you are uncertain about your decisions to invest.......research and homework is a must when considering spec investments....
There needs to be preparation for a loss at the same time as an expectation of an increase in a companies market capitalisation. No predictions today but I think the cycle has commenced for the 2nd phase rerating of Gondwana and today, becasue there is no news, is just some investors getting set for the news.......and I think GDA has been way over sold because of the world and Australian stock exchange falls and the rights sellers getting set to be free carried for the free oppies.
The first phase was triggered by the investment update in the first week of january, the price went from 1.5c to around 5c, and settled to 3c with lows in the 2.4c vicinity, I don't think the second phase will really start until the news starts flowing which is when?
Maybe the 3c level will be the base start price with news moving to the 5c area in the following week ? I am still thinking if some of the planets line up regarding the multiple tenenements and target resources and potential jv's and gold results pending that a bit higher could be possible price level if the news flows and it's good. It could spike a lot higher if it is over bought. But spikes just hurt overly keen buyers in the short term.
Cheers Fatstocks.
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