Shorting Activity:
While it has been discussed that there may not necessarily be a defined horizon from when a short position can be closed out there are (in my case and I'm assuming other people's cases) defined time horizons on when stop loss commands expire. A prominent hypothesis with regard to the tactics of traders is that the stock is shorted to trigger stop losses which were installed at low levels and using them to reach low levels to close out the positions. Therefore there would have been stop losses assumed at various point between the initial 1.50's (post consolidation equiv.) back in November last year up to the 3.00's in January this year and time horizons on when those triggers could be activated by. These stop losses would have all been triggered by July which stands to reason that any existing stop losses above the strong support here would only be recently installed. I'm guessing the levels were around 1.60, 1.70 and 1.80. I'm guessing there won't be too many at 1.60 since the price really sailed past that point which makes me think if there is any action in the shorting side left it will be in the 1.70-1.80 range. 1.70's hasn't been tested so that's where my prediction of 1.60's came from. 1.80 range is still fighting hard though so it may very well be an indicator that there are not sufficient stop losses at 1.70 and enough resistance at 1.80 to stave off the prospect. But I think sorters are running out of time to try and hit any remaining stop losses because:
SDV
This project IMO is what is going to protect GXY from any discussion of supply glut from a spodumene perspective and lock in the SP level. As previous calculations have shown as far as I'm concerned the missing piece isn't about joint ventures or offtake agreements etc, but in the major deal: the debt facility which will fund most of the project. Two points here:
* If the project doesn't require major funding now we don't need to rush into securing funding. We only need funding just before we need to make the big spend, right? This gives us more time to build up the cash stock which increases the chances of holding onto more of the asset.
* If the project needs to show full funding before it is approved to be constructed, then my guess is it is only waiting for the deposit on the loan to be high enough to engage the transaction which by my calculations is either during next quarter or more conservatively the quarter after that.
What effect the announcement of SDV being funded i.e. reducing risks of oversupply concerns, increasing profit projections and unlocking a huge value asset the share price IMO will either: already be creeping up to where the fundamental analysts have been saying for months with a run at the end to finish it off or... Go vertical for days. I can tell you I prefer the former and I wouldn't be the only one there.
So if the short positions aren't closed out by that time they will be stuck with a new support level and get hit with a huge loss, with no recovery on the horizon.
Once the funding is secured the SDV financing could be funded soley from Mount Cattlin or be contributed to by the pilot plant operations which are on track to hit 2,500 T compound (another $3M+ per month).
Therefore I'm sticking with sell until any and all stop losses for 1.70 levels are exhausted whereby there will supposedly be no more room at all for the SP to go.
Not professional advice. Obviously.
GLTA
GXY Price at posting:
$1.82 Sentiment: Sell Disclosure: Held
