Running discussion on SP, page-6008

Summary of some of today’s 600 plus HC posts plus some of my own –

1/ Michael Langford calming the market is one of the main news of the day IMO

“Just topped up my holdings, you'll see the addition in the T20 when it's published at the end of the month.
Short term volatility provides opportunity....” - ML


Quite reassuring in addition to last evening post -
“What a day....
My approach to investing is always based on fundamentals, I haven't sold and am happy with my position.
Whilst I am disappointed in today's price move. Short term volatility does not reflect long term value in my view.” - ML


2/ Possible massive over-reaction on Thursday. Markets hate director selling as this is generally taken as lack of faith in company but it really did appear that he was just taking money off the table. Of course, shareholders have a right to be angry.

3/ IMO,the continuous downtrend where AVZ was lagging lithium is predominantly due to news of Chairman’s impending sale, leaking to market.

4/ Sell the rumour and buy the fact is a well known trading strategy adopted by big instos. It is quite possible that that relentless selling by instos is over or at least would be substantially reduced.

5/ It would be great to see broker reports confirming above if at all that is the case - ideally, if AVZ has to move up then the retail investor would have been selling yesterday and instos buying today.

6/ Possibility that yesterday was final capitulation. I specifically mentioned these words yesterday – “Today might be capitulation low if AVZ recovers and starts hanging on above 9.5 c but preferably above 10 c”
https://hotcopper.com.au/threads/running-discussion-on-sp.4111732/page-5788?post_id=33576934

This is exactly what happened today. Rise today was on high volume, with a small quick morning backtest (8.9c) of close to yesterday’s lows, with a confident finish over both 9.5 and 10 c to finish well clear at 10.5 c
Yesterday’s fall was the mother of capitulations. Massive absorption near the lows yesterday with panic abruptly “seeming” to end one day later.
So far, from I’m seeing is an almost perfect scenario that I’d like to see in case of capitulation low.

7/An argument can be made that at 10.5c we are still well short of price of earlier days. Point is perfectly valid and IMO, shareholders should consider this possibility.

8/ Nevertheless a counter argument even to above point exists – Selling of past couple of days was firstly inspired purely by massive Chairman selling crashing through some support levels – I cant remember ever witnessing such an event on any other stock. Huge initial panic was understandable but that would again have triggered stop losses as 10-12, 12-14, 14 to 15, etc. were all different levels. Understandably, it is hard to overcome such a shock instantly. Remember, I’m not dismissing the argument that capitulation low has not been made- I’m just giving another point to consider

9/ IMO, there was no FA reason for indiscriminate selling. I don’t think selling on Monday was due to the “transport cost” issue

10/ “Transport cost issue” could still come back to bite later on (I'm not dismissing it), but IMO, that would probably be addressed at feasibility stage. There is nothing to suggest that share price cannot rise much more till then

11/ Another argument in favour of argument that yesterday was final capitulation is that if you see 1 year chart, we have an almost perfect long term double bottom at around 9.5 c

12/ Even if not final capitulation (if you want to argue that), there could be some sustained support at this level now considering that it is long term double bottom. If these levels break however, it could start to become a matter of concern.

13/ On way up (if at all), I’d expect some stiff resistance around 15 c for some time at least

14/ JORC coming up next month is great catalyst for renewed interest. Shareholders who both at much higher levels might unfortunately be stuck for some time till JORC at least to get back better prices (if at all AVZ is going to rise)

15/ Overhang of balance 30 million shares of Chairman will perpetually remain at the back of people’s minds. Huge negative.

16/ I’m a little surprised that AVZ has not had any official update to market, calming shareholders

17/If at all, we have further backtests, I’d ideally prefer share price to not go below 9.5c

18/ Share price movements are never linear. Very hard for share price to just keep on falling unless news is truly horrific

19/ Keep in mind that we had a strong close on high volume today despite it being a Friday where buyer sentiment is generally weak, which is a further positive.

20/ Some good upcoming news from @Wombat2 below on upcoming drill results as a possible price revision catalyst
https://hotcopper.com.au/threads/upcoming-drill-results.4236091/?post_id=33602794

21/ A good overall summary from @Mining8 below on massive size of AVZ deposit, average lithium intercept, best lithium intercept thickness, median lithium intercept thickness, average lithium grade % etc compared to peers. As we can see, AVZ is miles above. Also further information on tin resource, parties showing interest in AVZ, etc.
https://hotcopper.com.au/threads/avz-chart.3105143/page-4461?post_id=33598795

22/ Good chart from @h00ts
https://hotcopper.com.au/threads/avz-chart.3105143/page-4449?post_id=33596080

Average price today 9.5555 which is perfectly in line with long term bottoms.

23/ Good comment from @Dr_Manhattan showing how all was forgotten after last year’s similar sale
https://hotcopper.com.au/threads/running-discussion-on-sp.4111732/page-5896?post_id=33591313

24/Final words –
As a further disclosure, here are 2 of my main comments of last few days
https://hotcopper.com.au/threads/avz-overview-–-pros-and-cons.4226140/?post_id=33485737
https://hotcopper.com.au/threads/running-discussion-on-sp.4111732/page-5788?post_id=33576934

I’ve also mentioned plenty of negatives and not just positives, in order to present a balanced opinion, although I think ....I think pros seem to outweigh cons, at this price at least. Happy to be corrected and hear other points of views.

As I mentioned earlier, I would be selling if I feel warranted on the way up. I’m somewhat comfortable holding AVZ at these prices (as AVZ seems to have good FA for the price) but I am not necessarily going to be a long term investor and would be trying to take advantage of price volatility if possible.

So absolutely no part of my comment should be construed that I’m suggest to hold till eternity and bet the family farm on it. So, please DYOR.
Cheers