On one level I agree with your caution, the gap could well close. ARD appeared on DT threads a few days before todays move so it's inevitable there'll be some profit taking this week. That said, given the general sentiment around silver there could be a runaway growth in ARD heads as they move to reflect gains that other silver stocks have made, (in any case that chart is full of gaps, so hard to know just how important the last one is). There's a tonne of profits people have made in CCU, SVL and AYN that are looking for somewhere to park.
The people who got into those stocks early and have seen 300% growth or more are likely to be confirmed silver bugs, who whole heartedly believe that there's still massive upside in silver plays and the POS, I'd be betting that with seemingly good news flow and a compelling story they'll be happy to continue to buy ARD heads way into the 20's and probably higher and hope/expect it will make a similar move to the others, especially if the company have some good news up their sleeves (drill results perhaps?) - I'm one of those people and know plenty more like me.
It seems that the reality is that any company that was developing a silver asset as potentially profitable more than twelve months ago with the POS in the teens is almost guaranteed to make a good go of it with prices heading north of $40. The one reality check that many aren't allowing themselves (distracted by their gains) is that after a massive surge the POS will almost certainly slump back, where that surge tops out and where the price falls back to are the keys, all these ASX silver plays need the POS to be maintained at over $30 in the long term to justify the bold price predictions, some may need it to stay over this just to be profitable at all.
I was hoping to buy more options today, but the spectacular gains today surprised me, and I wasn't quick enough to get in at my price point. If/when profit taking occurs and the price falls back I'd be looking to accumulate, some of this growth may be pumped up by DT's and over exuberance, but I wouldn't count against a sustained rise over the next couple of months. For the short term I'd anticipate more gains tomorrow, we may have finished off the days high, but I suspect the volume of trades and share price growth will have attracted more DT's to have a play, expect lots of volatility!
All IMHO, DYOR, etc, etc...
ARD Price at posting:
22.5¢ Sentiment: Hold Disclosure: Held
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