Over time I have noticed that MEO was one of those shares that traded poorly on a positive day for the blue chip stocks. I have noticed over the years that this happens to quite a few of the small cap stocks. Today it was different for MEO.
When this has happened before fellow MEO posters have put it down to either profit taking or needing the money for investing elsewhere. It could be any number of reasons.
In my mind I have always put this syndrome - the negative on a positive day - as the influence of day traders. The DTs are busy elswhere, mainly with the blue chips, on these bullish days leaving the small caps alone leading to smaller volumes.
Leaving out announcements and outside influences, large volumes on any stock on any given day is usually created by short term traders through either manipulation or pump and dump. When the larger stocks are in a slump then the smaller stocks seem to be given a working over.
This is one of the reasons why we have so many of those please explain announcements. Manipulators don't need much of an excuse to trick the masses. Today I thought the strong opening would cause a fallback into negative territory for the day but this didn't happen.
To me the fact that MEO has broken this pattern shows that there is confidence building in the company as a long term investment. Sure, there is still profit taking, but that is a natural part of sound investing. I feel that more of the profits are being re-invested in ever decreasing turn arounds. This is shown by the triangles on the charts.
In August the peaks were smaller than the troughs a bearish sign. In early September they were about even (remember the days in the sixties, trying to move that 3mil capper at 65, trying to force the price down). Now the bullish signs are there with the peaks greater than troughs.
Of course when the announcement comes then volatility will follow for a while but I don't think we will ever go much below the dollar again, once we reach it.
Whether it be Mums, Dads, kids or institutions the positive signs are there for MEO.
It is a fact of life that institutions with their vast deposits cannot play the market like you or me and are therefore light on in the top 20, as they usually are with small caps.
They are still treading carefully with MEO because of past disappointments but I agree with educator a good support base is being formed by four cornerstones:
1 - Access to resources that are required for future global needs. 2 - A sound plan to manage those resources. 3 - A good management team. 4 - Investor confidence leading to solid support.
These cornerstones have been placed on good foundations, moulded through past learning experiences.
It's not a matter of if but when the institutions come on board then, I believe, a great company will be formed. The corner stones are there. Now the building starts.
As we have always said patience is the key. Building the company one announcement at a time.
MEO Price at posting:
79.0¢ Sentiment: LT Buy Disclosure: Held
