I love trading the stocks where i can capitalised my ST-MT gain on pain of shorters.
Did well with few of such stocks including KDR - was lucky enough to buy at average of $1.28 just day before the TO and ripped 40% gain in day day.
Not saying it will happen with BAL but here is my analysis, why I am interested in BAL at this price.
Good to see today's volume is bit lower than i expected being friday and weakness from overseas market.
TA:Nice C & H formation on Weekly, however itwould have been perfect set up if Volume for last 2 weeks would have beenlower. But looking at large shorting position 13.5% by 20th May andincreasing 0.3-0.4% every single day is adding up bit more pressure on volume(30-45% shorts/day per trading volume). Overall market sentiment is also infavor of shorts.
FA:BAL to climbed back to $15-$20 will only bepossible with approval of SAMR for camperdown dairy. However, BAL doing welldomestically compare to its peers. Its organic formula always running out ofthe shelf quickly from Coles, Woolies and Chemist Warehouse. That’s nationwidetrend. If BAL only able to increased its supply by 20-30%, that’s furthergrowth domestic growth/profit of 20-30% compare to prev quarters.
Onother side: BAL Trading at 6 X Year to Date Rev
A2M Trading at 12 X Year to DateRev
BUB trading at 21 XYear to Date Rev (Still making loss)
Hence, we know which one is cheaper at currentstate but off course current market caps of these companies are being speculatedbased on their current & future presence/market win in China. That couldchange quickly though.
ShortSide: Well even at this price nearly30-45% of trading volume per day is coming from shorts, which is quite big number.For example, avg 1m trade volume, 300-450K being sold by shorts, 200-300K beingsold by short term-day traders who could not hold longer due to stop loss ormargin requirements (in case of CFD traders). Rest small amount being dumped byMT-LT holders. So basically big players aren’t selling here but buying cheapshares offered by shorts, who ultimately will need to buy back from market tocover their position.
Also, in total out of 113m; over 15m shares are nowsitting as shorted, which is quite big numbers. Once, a mid-large fund decideto do pocket by of few millions BAL shares, this could quickly hit back to $10+& If any sign of SAMR certification or increased revenue even domestically,will gap this stock up post announce and another danger for shorts to come outfor cover.
Conclusion: Currently; overall market sentiment is the only infavor of shorts. But as said, this could change quickly once any +Ve newsthrown out by BAL.
ALL IMO. Please DYOR
