I mentioned I was looking for items relating to types of behaviour that are damaging investment in the junior gold space.
Here is an overview of the types of manipulation stocks can be subjected to.
do not advertise external links.au/companies/news/900548/explaining-illegal-market-manipulation-900548.htmlI suspect this sector is subject to frontrunning, particularly advanced explorers/developers just prior (over a couple of weeks) to a major financial announcement. And to top it off, a 5 day VWAP is used. Existing shareholders are taken to the cleaners and the price can take years to recover.
Another to watch for is where a stock has clearly hit a floor. Liquidity has dried up. Then all of a sudden a series of bids appear that push price lower. Some of the higher sell bids are withdrawn. Keep an eye out for this one particularly where an ann is about to be released that will elevate the price quickly. Seen a few of these lately.
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Recently saw a 603 in a junior gold stock where transactions by a new substantial holder are not reported. Two holders, a minor that apparently purchased shares over 44 trading days where the average price reported price (or lower) was only hit on 3 of those days. This was 10% of the holdings. The 90% was purchased over 33 trading days and they purchased 30% of all shares on offer. For the first 16 days the price was up to 50% higher than the average purchase price. Did an extremely good job of averaging down. Trading periods overlapped. All transactions that result in a substantial holding should be reported. Trend was trashed and momentum now sees this stock trading a further 40% lower and 25% below the most recent CR price. I consider this an opportunity. Just waiting for the knife to stop falling.
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The old Short and Distort is a real problem for the Aussie market. We are not tightly regulated and much of the activity in this space originates overseas.
disallowed/business/markets/caught-in-a-bear-trap-how-short-and-distort-attacks-are-costing-australian-investors-billions-20201204-p56ksl.htmlIt is hypocritical for shorters to complain about short squeezes when their own behaviour is suspect with hedge funds often involved.
Currently, 11 of the top 100 shorted stocks on the ASX are gold companies. Not unreasonable when around 12% of all listed companies on the ASX are gold related. Many can often be at the top of the list.
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Many of our producers are running profit margins of 30-40%. This would make them highly desirable and therefore likely to attract a greater degree of unusual behaviour.
I have noticed some rather odd price movements followed by notices of substantial holdings but most will go under the radar (cap holdings to under 5%).
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The good thing is as POG improves and trends are established, even from a lower price, the sector becomes harder to manipulate as buyers are lined up.
If you see odd things happening, call them out.
