I'm wondering now whether short-term trading might be a good option with this stock. I haven't yet decided on that path as it goes against my nature – I'm a long-termer and have approached most of my investments with that strategy. Mostly to good effect, although some notable losses when I hung on too long.
I plan to hold the bulk of my current shares in AZY for my original timeframe of around 2 years, as I think there's a good chance of it doing well. But I'm now starting to consider hedging against the chance of things not going well. By "not going well" I mean in terms of the share price, not the assay results. The two are, strangely, divorced from each other.
Here's my thoughts on the (maybe) change, and I welcome reasoned responses in case I'm missing something or am on the wrong track. I've blocked people like Shines and Bobby, so have no interest or idea about their way of thinking. I'm not a cheerleader for AZY, nor am I a pessimist, and I try to remove emotion from the equation in making decisions.
I think charts are useless for predicting future behaviour, but are pretty good snapshots of past behaviour. With that in mind, I trawled through the past two years of AZY announcements and overlaid them on the 2-year share price graph. There are exceptions, but there's also an obvious trend. Generally, following a very good announcement the price goes up quickly, holds for a few days, then drifts down to, or below, the price at the announcement. There are exceptions, but that's the dominant pattern.
This all makes me think that buying on the dip and selling on the announcement might be a better strategy than just doggedly holding and accumulating. My reasoning is this: I think most would agree it's unlikely that every announcement coming up will be as good as the recent ones (i.e the big MRE increase in Citadel and the Minyari East discovery). Given that these announcements did nothing for the share price, why would future ones be different? Even if they were of the same magnitude, I would expect them to have the same result. And if they are less than that, surely we can expect a worse market reaction.
I think about what is causing this pattern. Following the course of sales, it does seem that the share price is being held down artificially. There'll be a dozen theories for that. When the trading volume was low, I put the sell side down to nervous retail holders who had bought in at the CR getting out with a small profit (although even that was a stretch as most retailers are just like us and have seen the good news). But with the volume increasing dramatically recently, it seems that the trades are bigger players. I wonder if what we're seeing is cross-trades between the same party.
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