Dec 03, 2010 1 Ram Resources (RMR) ? What?s With The Selling? Categories: ASX Speculative Stocks
Late last month I posted an update on Ram Resources (RMR) after the share price had broken through a major resistance level at 3c and the share price closed at 3.2c on that day. In that post I was speculating on what the reason was for the sudden buying interest. It now appears obvious that insiders were loading up ahead of an imminent announcement.
On Wednesday the company released a mineralogical study on the Motzfeldt project and today the company announced drilling results that were very good. High grades of tantalum and niobium were reported as well as a new mineralised system containing high grades of other rare earth elements.
So what happens to the share price after these two positive announcements are made? A very large seller appears at 3c and the share price collapses to the previously mentioned support level at 2.5c.
I can only hazard a guess at what the motive is for this large seller but there are two possibilities that come to mind. Either it is a very smart trader who is deliberately trying to spook nervous traders into selling off their holdings into his bids at lower prices, or there is an inexperienced and very panicked investor that loaded up on the inside news who is now stuck holding a large parcel of shares that are showing a loss.
If it?s the case of the later, then it would serve them right for trading on inside information.
I still like the stock but it may take time to recover as the large sell order at 3c may hold down the share price down for some time, despite the good results that the company has announced.
RMR Price at posting:
2.2¢ Sentiment: LT Buy Disclosure: Held
