descending triangle, page-18

I agree. Charts only for blue chips and real estate that run predominately on sentiment.

For specs that run on news (and in the short term rise on rumours!) work best with a risk adjusted predicted price, which is a much trickier proposition than putting a few numbers into a program and coming out with fancy (and baseless (ie ignoring announcements) predictions.

Look at it this way, assuming some very conservative estimates of SP movements (probably reasonable at time of commencement of drilling though now likely unduly pesimistic).

a 50% chance of fall to half current price = 17c value
a 15% chance of no change = 10c value
a 15% chance of 50%-100% rise = 18c value
a 10% chance of 100-200% rise (av 150%) = 20c value
a 5% chance of 400% rise = 20c value
a 3% chance of 800% rise = 26c value
a 2% chance of 1500% rise (ie $10 = 440BCF) = 20c value

Total CONSERVATIVE RASP = $1.26

These likely underestimate the potential greatly given gas and oil is present above Leadville and the risk that this will be non-productive is now likely 25% rather than 50%. I'm estimating a RASP with currently known knowledge of more like $1.50-$2.00.

What this says is that if you were to invest in many specs with similar odds at these prices you would probably have a 100% profit over a few months.

This MAY fail and I may lose money, though maybe I'll make it up 10 fold on other specs I hold. I would say that a 50% risk of failure of a spec is very good odds based on historic spec success rates!

LOW RISK = LOW GAIN, HIGH RISK = HIGH GAIN - show me a spec any different. The trick is in the fundamentals with specs.