Do we think we have seen the bottom for this phase this week at 7.5?
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Last few weeks we were on decline. Even last week we had lost around 5% and finished at 7.8. But this week looked different. Started weakly, doing double bottom at 7.5. Then the buyers stepped in. Finishing the week barely under double digits at 9.9, over 25% increase for the week.
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So what happened? Why this turn around? As many of us have been saying that the sell off does not look sustainable, based on fundamentals. Also tax sell in play. Though there were others with the opinion that we should be around 5s. As I had myself felt that in short term anything can happen. Depending on individual risk reward, we either sell or buy. Probability of sp coming back was good, but no certainty. Maybe probability has played and sp trying to reach a fair value, which again can be different for each of us.
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So those with conviction were buying. I have been writing weekly including my price. My heads sit at 8.3 and oppies at 1.3. Couple of weeks back as I had written, it was 8.5 heads and 1.5 oppies. I bought more after that last 2 weeks. I was told oppies reaching 0.5, I was getting ready for that and missed picking more at around 1, but I did pick fair few. Maybe it can still go there, let's see. Incidentally, Tino as well couldn't restrain the cheapies. And he is a clever man. His buy was under 8, so he picked up close to bottom, good on him.
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So do we think we have bottomed in this phase? There is no guarantee, but probability says that we may have. General market conditions are improving. We have got over the hump of tax sell. Lot of good things to happen to us soon. Extra production, Tino selling the company etc. So a very good chance that 7.5 may have been the bottom.
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Other thing to note is that our decline was on low volume. In the downtrend, there was just 1 day we did over 1m shares. Last 3 days, close to 5m, mostly buys. Those following charts, numbers, it should be looking very good. Like a break out. Wouldn't be surprised to see some punters join us next week.
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I know some people cannot digest what I say, although I am clear that what I am doing is my risk reward. In nearly every post I put a caution, as these type of stocks are always risky. But that doesn't stop some to take pot shot at me. Repeatedly, even though I refrain talking about individuals and stick to stock. Oh well, everyone has to find a living, so it's fine. Honestly it doesn't bother me.
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So where to from here? Very high chance of finishing double digits next week. Some still calling for another 8 play. It can happen. Stocks always give a chance to those who missed. But it played in 8s for quite some time, also in 7s for good time. So it might say, I gave you the chance, but you didn't take it. But I wouldn't be surprised that even after hitting double digits it may do a back test of 9s,before finally bidding good bye to 9s. Although probability is good, but anything can happen, so please dyor. Enjoy your weekend and all the best.
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