I could post charts like the following one all day long. I have a lot of stocks on my watchlist that behave like this and have posted others before. Merchant wants us to believe that if MNB is down heavily, then we should sell. The market must know something. The stock will never recover, this end of the market never ends well. etc etc., all the usual down ramping lines.
SNT fell from 15c to 1.4c over a three year period. It would have been great to sell a few years ago at 15c but should holders have cut their losses after it fell below the previous 5c low? Probably, as it did fall to 1.5c but that's with the benefit of hindsight. That fall was much worse than what MNB has experienced but did that make it a sell at 3c, 2c or 1.5c last year? Today the stock is at 7.9c and trending up from the 1.4c low for nearly a year now.
If you bought the rebound to 5c last year only to see it fall below 3c again should you have sold? With hindsight, obviously not. At the time you might have thought it could be a dead cat bounce or the market knows something, etc etc.
SNT and MNB are two very different stocks although both are pre-revenue. The reason I post this is to show that a stock can be sold down heavily but that absolutely does not mean that the company is dead or the sp won't recover or that the market knows best! News can trigger corrections and down trends. However momentum can push them to extreme highs and extreme lows. Look at the spike from 9c to 17c in a single weekly candle.
SNT jumped from its 1.4c low to 5c over just a few months before falling to 2.8c again but that move to 5 was a sign of higher prices and today it's at 7.9c (7.9c not showing on the weekly chart below).
Getting sucked into buying too high or selling too low does not work well. While it's harder to do, doing the opposite gives the best profits but of course only hindsight tells you the exact highs or lows so always easier said than done and of course the company has to have good potential to succeed. Minbos has that.
Just an aside, if you were in SNT 5 years ago, you had to endure watching the sp slide from 12c to 1.4c. down 88%. However anyone buying at 2c or down to 1.4c would now be up 4 fold. should we sell based on a weak price? Does the market know best? Did those selling SNT below 2c know something that others did not? Was the very low sp a sign of what was still to come? These are all the lines we are fed by those that want to create fear. There are stocks that got sold into oblivion so do your research but don't get sucked in by the many cliches dished out by down rampers. Thousands of charts prove that the market is extremely inefficient, especially in small and micro caps.
MNB's recent spike to 9c might be looked at as a dead cat bounce by some. Others will see it as a taste of what's to come when funding is completed.
SNT
MNB
