Volatility as expected?
Yes AZL lost 4 pips to finish on 4.1c. Our volume was moderate, just over 42m shares traded. Small range of trading from 4.1 to 4.4, but finished on day's low. Not sure how chartists will interpret that.
So what is happening? Expected play or are many surprised?
The day the CR Trading Halt came on 14th came, I wrote this on 14th -
It was already playing around 3.5 many times, as I had been writing, a very strong support level. So do a rise just below support level is good. They say price comes back near CR level, so there is chance it could go lower, but we now have 3.5 as very good support - so it could just touch that and reverse from there. From pattern perspective it may look very good. But lets get the confirmation (which I am reasonably confident based on what has been written here). Then, we may have some little volatility for few days before we move - there is always a chance of going slightly higher first before checking support and reversing - hopefully this time for good. Just a pattern, does not need to happen that way, so best to follow price action.
So though it may look surprising, I half expected this play. First to go high. And then to come back and test support. So it went up yesterday and is now coming back for that support. So not very surprising action. Although we finished at 4.1 today, we are still above 3.9 - pre Trading halt price, so its not bad.
There are 2 key events to happen shortly - one the CR shares will be issued. Second the PFS. The CR shares will come on Thursday. I had thought there is one week minimum notice period and hence Monday, but don't don't the details, so could be within some rules. The PFS is the conundrum - will it come before Thursday, on Thursday, or after Thursday. Depending on when it comes, what is in it, how market reacts - the time could be critical from a short-term trading perspective (with respect to CR shares). Long term reaction and effect will depend on what is in the PFS, as well as how the Li sector is going. Many hoping or thinking it may not happen by the end of December, but based on repeated mention, my belief is there is very high chance we will have it before end of December.
So I mentioned on 14th that it may go high and then check support. So what is that support level? Based on prior trading 4, 3.8 and 3.5 are the numbers. But that was without the CR. Now the 2.9/3 level also comes into picture. If we are able to reverse from here, as mentioned before key level is to get above 4.5/4.6 and stay above that, next above 5. Yesterday we closed at 4.5 but the 4.6 level which was our support when dropping from 5.8, has become a small resistance.
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On Personal front, there were couple of fellow posters who asked/mentioned something.
First, whether I am happy with price range etc and whether I have bought no - Effectively no, I did do some day trade yesterday but got out yesterday itself - not much though. Reason I wasn't sure whether the rise would be sustained, as I had mentioned on 14th I expected that after initial rise it will come back.
Second, someone asked me to do my Mathematics again when calculating what price it has been to the CR buyer (I had mentioned around 2.9c to new Cr buyer). Yesterday we went up to 4.7, so there is chance to assume I may have got it wrong. Well, I can assure that poster, that though my Grammar may not be that good, my Maths is. In fact very good and I am lucky. One of the reasons I play with all the numbers and do Weekly Reports across 3 sectors for around 150 stocks. In the Placement Report, Paul did not mention the block trade price of 3.4c. I have seen 10s of these flow thru raise by Canada over last year or so, and not a single time I have seen the block trade price has not been mentioned. But Paul didn't mention that. I didn't like it. Why he did this way, I don't know, I would never do that. As a person you want to provide as much info to punters so that they can make the right decision for themselves. In the announcement, if someone didn't know what is flow thru raise, they may think raise was at 5.1. Which it was not. The raise price is the block trade price which is 3.4. This also includes 1 for 2 oppies - so oppies at 1 or 0.9, means the buyer of CR has got it effectively at 2.9c or so. One of the reasons I was wary of 4.5 level for a sell, because a CR buyer of now could have sold around that level and made a profit of 50% in one week - 100k investment, 50k profit in a week - many may be tempted. Not everyone sells and they may look for higher gains, but many may.
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So personally I am still waiting. For a good price action (up or down) or good announcement. There is a chance Paul may have told the new CR buyers that something good may be there in PFS in order to get them in (just speculating, I don't know), so lets see what comes out.
So what may happen now? Depends on whether buyers are there at this level before the CR shares come on. If not, we wait for CR shares to be issued. They may try to push it up to create buffer for sell (as usual, not everyone may be looking to sell, so there may be a limited group). Then the PFS. Chances are it may be all right - I am basing it on language Paul has used till now. But how will it be taken by punters/market - not sure. I wouldn't try to speculate, instead will look at it, see how market reacts, and play accordingly. But there is a chance it may be very good. Will that happen? lets hope so. All the best.
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