AGE chart, page-1698

Well, are we into consolidation or decline?

AGE slided down today 4 pips along with other U stocks and a number of other commodities to finish on 7.1c. Our volume was medium, around 33m shares traded, which was in the same range as yesterday. Our VWAP was also exactly 7.1c, so a fair finish.

ASX U stocks also declined. The average decrease of shares I track was between 5 to 6%. AGE declined by 5.33%, so right on average.

So why are U stocks declining? As I wrote on the weekend that my gut feeling is that we will move into a consolidation phase. Some of the reasons I have mentioned there, but the biggest factor for me to believe in this consolidation was because what happened last time in September. We ran away for 4 weeks, most stocks doubled/tripled, there was no consolidation, and when the rise stopped, most stocks lost 50% of their gains. There was a lesson there and I felt punters would be more cautious this time. I feel consolidation is a necessity to change registry as well as people to take profits in an orderly fashion. So this was something forthcoming. As with everything, there was no certainity, but sometimes I get a bit lucky in my prediction.

What about a situation that this is a large decline and not a consolidation? It can happen, but the probability according to my calculation is not that high. There are a number of factors for that which we have gone thru a number times so don't want to repeat it - especially around the prospect of U sector. The bottomline is U stocks should do very well in 2022 based on a number of analysis. The probability for that is quite good as I have read, though I could be wrong.

Personally, as I had mentioned on weekend, I was expecting this drop, so was selling my trading shares from Thursday. Got rid of most by yesterday morning on open. I still held good amounts of shares that I keep for long and don't trade. Today I bought back around 60% of my trading shares that I sold. Picked up AGE also at 7c.

What next - I am expecting a bounce tomorrow. Don't have a particular reason as such but have based on two thoughts. One, I am expecting that this is a consolidation and not a large decline. In this phase I am expecting 15-25% correction. As of today most stocks have had this correction. If it falls further, then many including me have to rethink where U stocks will go in short term. Secondly, based on trading patterns, I have seen that if we have a fair decline for two consecutive days, there is a bounce on third day. What I am not sure is how big the bounce will be. Lets hope US U stocks start this bounce tonight and we tomorrow. All the best.