PET 0.00% 2.5¢ phoslock environmental technologies limited

New newing report is out, page-17

  1. 13,935 Posts.
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    More profit taking today. I would imagine that we had some traders buying late last week with the intention of selling on the release of the Newing report. Maybe a day or few days to clear those sellers?
    This seems a good chance to go to $2 before Christmas but I'm not sure if the market will need more news such as confirmation of new work, confirmation of the value of existing work, etc. Any pull backs should be a good opportunity for investors. A 4c dividend in 2 years (3% yield at today's sp) would be very nice on a high growth stock, especially if the earnings and dividends grow by 30% year on year for the foreseeable future but that is two years away still.
    I won't be waiting for any gaps to fill to be adding. Yes, plenty more gaps get filled than gaps that don't get filled. That's a pure function of volatility in share prices and perfectly logical. That is a statistical fact not a hard rule that should be relied on when investing (IMO) . The further the price advances away from a gap on more liquid, growth stocks, the less chance there is of that gap being filled in the near to mid term. Long term anything can happen but waiting 2-5 years for a gap to fill on something like a cyclical stock can see you miss out on moves of 50% - 100% or much more in the mean time. A good example is FMG (the first chart I checked for an example). There are two gaps, just below and just above $5 earlier this year. If a trader waited for those gaps to fill, they would have missed a near 100% gain over the next 5-6 months. FMG is a cyclical and so eventually that gap could be filled but that may be many years away and the 100% move would have been missed - and the stock might double again first. Selling that stock should be based on expectations of the commodity cycle rather than the fact that there is a gap at $5. PET is much less of a cyclical stock, so the further it runs from those gaps, the less chance there is those gaps will ever be filled - at least on any time horizon I'll care about, unless something fundamentally changes for the worst. Then I'd sell based on that fact and not because there is a gap on the chart. Each to their own though.

    https://hotcopper.com.au/data/attachments/1639/1639284-16eeb236a94d1adb1c0cea8a9db8108e.jpg

 
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