be aware of state of play, page-5

Fantastic positive thread. I was going to revive that charts thread from a few days ago, but a thread of this quality deserves more replies.

I thought the 50% fib at 7.3c would hold but sellers pushed through it today.

Anyways here are my thoughts, they're a bit long winded but hang with me. The absolute technical bottom that I can see on this chart is 6.4cents. That coincides with a gap fill, the share issue price, and just about the bottom of that channel. If we were to venture that low, I would be grabbing options by the bundle because at 6.4cents they would be at about 3.8-4c by my reckoning.

But here is my theory to why you should not be 'panicing' as such. We have retraced from 8.7c to 7.2c. That's a 1.5c drop. For the long termers out there, ask yourself this. Do you reckon you could bare the pain of further drops in the share price given that, by my reckoning, the most we would most likely drop is another 0.8c. By that, you would have already faced about 65% of this retrace. The world won't stop if this drops a bit more. The company will still be there digging up coal by the shipload. The share price is simply the lowest price that someone is willing to sell at.

The charts are showing there could be a bit more to fall, but my gut feeling is that buyers will warm to this retrace around the 7c area. For mine, anything under 6.8c is prime buying. If you are hoping to top up that, my friends, is what I consider to be the opportunity of a lifetime. This company is valued in the double digits, so why it's trading at these prices is anyone's guess. The charts can explain a few things, so have a bit of a look if you're interested.

To summarise:

# I feel the worst of this retrace has passed, any further drop is a prime buying opportunity
# absolute bottom would be 6.4cents, I expect that if it dropped that low it would bounce rather sharply and with quite a bit of volatility
# that said, sellers at these prices obviously do not value the company as much as it deserves to be
# indicators have dropped into a neutral zone
# the major reason for this to drop further is the recent huge volume, hence some short termers still having to exit
# another reason is the gap could be filled at 6.4c
# My conservative targets are 9c by Jan 2011, and 15c by June 2011. I am 99% confident that these targets will be met.