Has EXT sentiment turned for the better?In the last few months...

Has EXT sentiment turned for the better?

In the last few months EXT holders have seen two dramatic falls. The share price is now about 30% off the 2011 high, reached just 3 days before the Japanese earthquake.

Recent trading in the $7.25 to $7.50 range has seen large volumes. Earlier this month I noticed many motivated sellers, with few buyers during the day, but at closing auction a lot of large buyers come out - and are usually unfilled.

Recently, the sellers have been less driven. I interpret that as being sellers that wanted to get out in the low $7s have already sold, while there are other sellers waiting above the $7.50 mark. There are still large buy orders during the day, usually holding the price to one level. At close, we are still getting large buy orders that are unfilled during the auction.

Today is a good example. The market as a whole is down over 1.5%, other uranium stocks are way down (eg BMN down 6%, DYL down 3%, PDN down 2.5%). But EXT has solid buying at $7.35 to $7.37, with about 50,000 shares in the buy queue just at those prices. Consequently the sellers dipped into these buy orders and the price fluctuated only a few cents from $7.37 to $7.39 for most of the day. As I write there's been a spike in price, so EXT is up about 0.5%. That is remarkable given the performance of other shares.

There are still many sellers, roughly 5,000 at each price level. At close I expect there'll be more sellers. But if past days are any guide, there'll be >100,000 buy orders waiting to be filled, and the close price will edge higher.

We have the M.O.R.E program resource upgrade due in 5 weeks, with potentially a substantial boost to the resource. We have both Rio and the Chinese interested and waiting to make a bid, probably at around the $9.50 mark (based upon CGNPC's last bid). Comparisons with marked declines (eg the GFC) show it takes 3 to 5 months to recover sentiment - so far we are 2.5 months from the Japan event.

So I see that sentiment is beginning to turn up. By the end of next month, after the resource upgrade, I anticipate the share price will be much higher than today. Buyers are there in depth, and sellers are less willing to drive the price down.

JMO of course.