As I read it, small short term correction of the price of graphite is causing some fear and hence a sell off. Seemingly bad timing for MGY holders on the day of the announcement, having said that it makes MGY the most undervalued explorer/developer I can find on the ASX...
I understand the correction is being caused by weakness in Europe filtering through to lower growth outlook in China, and hence steel production. This isn't factoring in the prospective increase in graphite demand through emerging technologies which will have an ever increasing effect on the required demand over the next few years. And you know it will be under estimated as long as the technology remains relevant...
You can see by the trades going through that there is a real mixture of risk aversion and accumulation happening, which is why I think it's just a short term correction, especially for MGY having yet to really run.
Cheers, B
MGY Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
