Stoeger, If Boart are about to go broke, why do you think the...

Stoeger,

If Boart are about to go broke, why do you think the buyers are seeking 7.2 million shares while the sellers only have 2.3 million for sale. That is one of the widest positive differences we have seen in trading in recent times.

I do think there are several reasons for it. First of all, tax loss selling is over. Those considering selling out were much more likely to sell in June than in July and Boart must have been one of the shares under the most tax loss selling pressure because of its massive losses in the last financial year.

Secondly, the short selling has been getting smaller over the last month and the latest short selling total of 8.54% is the lowest figure for the last four months.

Thirdly, metal prices generally have been better in recent times. The five major base metals (Copper, aluminium, lead, zinc and nickel) are all higher priced than they were a year ago and some of them like nickel are up strongly. Gold is stronger than it was a year ago and it's last month has been very encouraging. Even iron ore appears to have stopped falling and has recovered to some extent.

I am not surprised at all in this turnaround in Boart's price this week, and I do think there is a chance of a decent rise over the rest of July.

I would like to hear from chartists because, although it is not my strong area, the Boart share price does look as if it has broken out of its medium term downtrend over the last four months or so. Aussie Bull gave it a buy recommendation yesterday for the first time in five weeks.

Clearly the half yearly report due in late August is going to be interesting reading.

GPASAS