If the SP drops 50%, it needs to increase 100% to recover.
Up until around 24/4, the SP had been trending down in line with the U market. I believe the downtrend then accelerated in the lead up to end EOFY tax loss selling. I normally use the last 2 months of the FY to establish positions in beaten up stocks in the hope of a new FY recovery. I probably wasn't the only one.
So $2 down to $1 - a 50% loss and a 100% gain if/when a recovery occurs. Unfortunately, the bet didn't pay off and the SP dropped another 50%. I probably wasn't the only one NOT expecting that.
So $2 down to 50c - a 75% loss and a 200% gain if/when a recovery occurs.
The current bounce is just a restoration of the elastic band that snapped after SLX's GLE announcement. That elastic band should still have enough tension to pull the SP up much further.
I don't currently believe the SP will make it back to $2 in the absence of a positive Paducah announcement in the short term.
I also believe the GLE slow down in relation to SLX technology development relates to actual scale up to full size units. Remember the test loop at Wilmington is half scale. I think they are confident that technology hurdles are sufficiently de-risked such that they can slow down to the pace of U market recovery. That means they can go fast or slow as required and there will be no technology road blocks that would impact their pace.
A positive Paducah announcement would mean the SLX technology will be deployed in a known time frame and that a revenue source is secured.
SLX Price at posting:
91.2¢ Sentiment: Hold Disclosure: Held
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