SFX (ASX) Ann: Second Shipment of Zircon Concentrate

Originally posted by Franpower: ↑

FWIW here is my take on the market action in SFX over the last few days. Please note this is my speculation based on keen observations, it may not be what's actually happening, but it's my best guess.

The fact that the price has gone up 3c on a day when 1million shares are placed on the offer and the overall market is down 1% says slot.

Remember my view is that the stock price has decoupled from underlying value and the share price is able to be fenced in wherever the 'market makers' choose due to the low volumes and the fact that most of the in-market orders, I believe, are placed by the market makers and can be adjusted to suit.

As the momentum of the last run up to 70c came to an end and the market makers sold out of what they had accumulated on the way up (into a genuine accumulation order at around 66-68c), the market makers then started pushing the price down eventually to bottom at the low 50s (something they could easily orchestrate because most of the in-market buy orders placed on the way up were theirs and could now be reshuffled, and new sell orders entered, to push the price downwards, these moves they knew would be aided by the obvious selling that would come in from some traders and holders, as the price retreated from highs).

the market makers then comfortably accumulated at an average of 52.5, a price point they had largely orchestrated, and it is now their order which is on the offer at 55, and it is them selling out of what they accumulated at 52.5 over the last 3 or so weeks.

my guess is that they know that a positive announcement is due in the next few days, and are now doing some buying at 53-54 to support the upward price movement, and simultaneously add competitive tension between other buyers who have also come to know that a positive announcement is coming and are doing some buying.

In so doing they are starting to make the 1mil at 55 look like a block of stock worth taking (which it probably given the relative cheapness of the shares) given the upcoming good news, or at least post the positive announcement (just my assumption based on the trends).

This strategy has been adopted before and once the market breaks through the 55c stock and they have locked in the profit on that trade (good way of selling a big block of stock quickly), they will then start buying stock and pushing the price up, trading on the way up while the traders are buying in. Then, once they think the trading buying has peaked (aided by their uptrend buying tactics) they will sell out and then start going short (as well as pulling their bids and adding in sell orders) and trade the price on the way down as traders who have loaded up then start selling out as the price turns.

Once they have pushed the stock back to a low they are comfortable with they will then accumulate at lows and do it all again.

this is a pattern we've seen over and over in SFX and it is what has killed volatility and volumes. Most traders know to stay out of SFX and institutions are not willing to buy because they know they can't sell if they need to.

This I believe will change once production is proved, institutions will then step in even if the volumes have historically been low because the cashflows vs price will support/justify the buy decision in a low volume stock.

at this stage, even before production is completely proved I think under normal market conditions (ie without these market maker effects) I feel a stock price of $1.00 could be justified and after production is proved a price of $1.40 - $1.50.

remember this is just my speculation but is based on observation of the market registry and share price movements over quite an extended period.

all the best

Expand

@fran
Thank you for the detailed explanation.
I think anyone else trying to get the odd cheap parcel recently has realized the games being played.
Monitoring daily and putting in the odd buy order has been entertaining to see how quickly it is covered by .5c amongst other antics.
Managed to get some small parcels that were sitting in the 53c range but has been slim pickings.
Would definitely be nice to have some positive news soon to get the price moving.

No.	Vol.	Price($)
5	33779	30.0¢

No.

Vol.

Price($)

33779

30.0¢

Price($)	Vol.	No.
30.5¢	9500	1

Price($)

Vol.

No.

30.5¢

9500

No.	Vol.	Price($)
5	33779	0.300
2	118661	0.295
4	73369	0.290
2	31790	0.285
2	121000	0.280

No.

Vol.

Price($)

33779

0.300

118661

0.295

73369

0.290

31790

0.285

121000

0.280

Price($)	Vol.	No.
0.305	9500	1
0.310	3874	2
0.315	37390	1
0.320	11377	4
0.335	1481	1

Price($)

Vol.

No.

0.305

9500

0.310

3874

0.315

37390

0.320

11377

0.335

1481

(20min delay)
Last 30.5¢		Change 0.020(7.02%)		Mkt cap ! $119.9M

Open	High	Low	Value	Volume
30.0¢	31.5¢	29.5¢	$191.0K	634.1K


Last 30.3¢		Change 0.020 ( 4.31 %)
Open	High	Low	Volume
30.0¢	31.5¢	30.0¢	123884
Last updated 11.23am 17/06/2024 ?

@franThank you for the detailed explanation. I think anyone else...

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