Is the upward momentum now lost?
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From a weekly perspective KNB had a forgettable week, moved up from 8.5 to 7.4. But also made a new high of 9.5 this week. So mixed play.
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So what does the price action say? It looks there are serious questions now on upward momentum. Last week I had said that its important that 7.6 hold. It lost this week. S, from my perspective, its now playing in an an unknown territory. Something I am not familiar. So I am not there.
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Last week I wrote this -
What are the factors driving share price? First, results, which has been good. Second, Gold price which is still playing around all time highs. And lastly Mr Datt. He has been a big buyer in last few months. Before a big chunk he picked in Placement (40m shares at 1c for $400k, and another 17m at mid 2s for another $500k) and Off Market transfer from GUE (35m for $1.12m at 3.2 share price). But lot of last month buying is on market. If you have someone buying big time, it will lead to price increase, it will not let price go much down.
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So lets look at 3 factors. Results, no new except one which most felt was irrelevant. So neutral on that. Gold price, neutral to negative, Mr Datt buying, totally negative. So overall, the pendulum has shifted to negative.
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I have been saying that one of the strong reasons KNB is rising is because of strong Datt buying. If someone buys 10% or more of the company, at any price, of course price will rise. But on Tuesday Datt announced that it had reached around 18.3%. Not much more to buy. No more buying pressure - at least that is what I assumed.
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So was I right in thinking that if Datt buy pressure is not there, there may be a question mark on rise of sp? I think so. I strongly believed that a large percentage of rise in SP is because of him rather than what others would like to believe. So I was happy to play and piggybank his play. On Tuesday when announcement came of Datta, it was it for me. I thought one big buying pressure is lost. Now wait and see.
.Personally I am out for now. When Datt was reaching 20%, I thought another play may come into play. i wanted to see what that is before playing. I don't know yet. My first total exit was in 3s, I made only 15%. This is my second total exit, but I doubled this time, fortunately, from early 4s to mid 8s. I am sure I have another play here, not sure when. Wish all holders well.
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So what may happen next week? Not sure. My gut feel is not good hence I exited. But I haven't been always right. So I hope I am wrong to think its going much lower. I will play on any price action that looks good. All the best.
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