AKE Chart, page-2296

Not advice, just thoughts ...

I think one needs to focus on one's chosen investment horizon: Is one investing for a few hours to days, or weeks to months, or years to decades. Focusing on your horizon helps neutralise the greed monster. If one is investing for days to weeks, one would probably not be holding right now, if one was investing for months to years one might be considering where one believed the price would be over that time period. Given the market is evidently crashing, and it is likely to fall before it rises, does one consider that AKE will survive the market cycle and if so where will its price be "on the other side". One becomes less concerned with picking a bottom in this approach and more focused on whether one has a net positive return over the totality of that chosen time period. Life becomes substantially less stressful. In every deal, there is always more that could be made, and more that could be lost. It is always wise to leave something on the table and not look to be the only winner. Translated to share trading, that means look for confirmation of a trend - which means you will not pick the bottom - and be satisfied with a predetermined gain which means you will not pick the top, but will trade in a safe range, boring but predictable over what ever trading horizon you have chosen.

What does one do about existing losses, in the light of the focus on investment horizons? Look first at the reward side: Ask yourself, what are the factors that underpin the value of my share? Eg Is it Lithium price? If so, what drives that price? Is it car sales? If so what drives the car sales volumes? Is it population, economy, etc? Where will each of these factors be over my investment horizon, and thus will the Li prices be up down or the same as now? Next turn to the risk side: Does the company have the cash reserves/cash flow to weather the down turn? Does it have the mineral resources to capture the upswing? What are the global and local political factors likely to prevent the company succeeding and are these probable or remote?

In the end you are asking yourself not where the bottom is, but where the price is at the end of your horizon and will the company still be there at that point in time. Lastly, remember the zero hedge mantra - On a long enough time line the survival of everyone trends to zero. Mines eventually run out of resources, empires fall and we all die: so your investment should always have a horizon and not just be "long term".

Having said all that, as far as the next few weeks are concerned, ask yourself "do I see the share market as likely to be lifting between now and, say, mid July or do I see it as likely to fall some more?" Therein lies your answer. In the immediate term the price of Li stock shares will have little relationship to the price of the Li they sell. From a TA perspective we are looking circa 950 as a target, but that could change again. If we get there too fast it will probably have to be revised lower, in the absence of the meltdown we would normally expect prices to trend down during June and pick-up towards the end. Once the trend down starts (which it has) we would expect it to run until the RSI hits oversold - which it hasn't yet. With a fall like this we would expect a double bottom at the end - a bounce of two prices close together over a couple of days, but we would also expect another fractal down (ie we are on the 3rd down so we would expect a slight rise and then another drop). The lift would probably be a couple of days and the 5th fractal drop would probably be about the size of the first, but not always. Is it likely to run away in a recovery? In this market? And given the world of risk and hurt around right now, do you really care if you miss the first 50c or even a $1 at the bottom? It is getting to $5 down, it is just as likely to be 6 or even 7.

Again, ask yourself what exactly is your acceptable risk level, what is your horizon and what do you think is going to happen over that time period. It will probably not be pretty in between then and now, but it may not really matter if you make your targeted profit at your targeted date..