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Is the SPP about to push the SP off a cliff???, page-5

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casajack

1,306 Posts.

229

09/12/19

07:40

Post #: 41861522
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Originally posted by Launched: ↑

I know the title of the thread may seem a little dramatic but if history is anything to go by then it may be what lies ahead ST for APT...

What I'm about to outline are facts only and you are welcome to make your own decisions after you've done your own research. I've obviously watched APT for quite a while as I bought in when it was in the $4's and rode it all the way through the last SPP (the highs, the lows and part of the run that followed) and sold out after my profit targets were met. We all wish we sold at ATH but its hard to complain about any stock that makes you multiple bags...

History may not always predict the future but it certainly gives us a good indication of what to expect (especially in the stock market as the same people control the same stocks).

I've seen a lot of holders quoting SPP action from other stocks but why would you compare apples with oranges when its easy to compare apples with apples?
You really don't have to look very far to compare the same stock and nearly identical set up to see what potentially is about to transpire...

Lets look at the charts and price action in the days leading up to, the day of and the days that followed the last SPP in '18 and compare to it's current set up going into the lastest SPP.

The first chart below illustrates price action around SPP in Aug 2018 you will see the 3 areas of significance labelled A, B and C

A. 5 days before the SPP was announced the price was pumped to a high of $23 (smart money leaving and/or shorting)
B.The day of the SPP Ann. Even though the SPP purchase price was issued at a discount the day actually finished green to everyones suprise (except the smart money locking in final positions)
C.5 days after SPP Ann. Share price had tanked to below SPP price to hit a low of $14.95 - a whopping 35% down from the price pump 10 days earlier!

In the 2018 SPP the sp closed at $18.02 the day before the Ann.
The SPP gave holders an opportunity to buy more shares at $17.05.
An institutional placement had also just been completed prior to SPP.
It only took 5 days for the sp not only to reach SPP level but drop well below to $14.95....

The next chart below illustrates price action around current SPP you will see the 3 areas of significance labelled A, B and C
(C is an illustration only and you are welcome to put your own target)
A.5 days before current SPP. Once again smart money giving it a pump (above $33) and getting positions.
B.Day of SPP Ann. Once again the sp finished green for the day (same as last time).
C. If history repeats then Monday morning you will see some more green (briefly) and then the red candles will start to appear like falling dominos or maybe this time might be different, right???

For those holders who are spruiking the fact that the raise is only for a tiny percentage of APT's market cap.
Lets look at that point also...

The SPP of Aug 2018 the sp was trading close to $20 and the SPP was for $20mil.
The current SPP has the sp trading close to $30 and the SPP is for $30mil.
Anyone see any similarities???

Ok, so if history repeats itself then what are we looking at in terms of retracement levels?

First lets look at the 2018 SPP and see how things panned out.
Below is the chart showing its retracement from its intial run up until the smart money leaving from the highs of $23 (1).

Once the smart money had left and the SPP was announced that triggered a sell off that had the APT sp bottoming out at $10.36 (2) only 2.5 months later. The sell off ended up breaking through the 61% Fib retrace level but falling short of the 78% before the next leg up was formed.

Below is the chart leading up to current SPP of 2019. The run is started from the bottom formed by the sell off after the 2018 SPP.

If history repeats then we can expect to see it push down toward the 50% Fib level of $24 (4) in the ST (remember last year it dumped below SPP level within 5 days, so $24 is a bullish call)...
If the full history repeats then we may see it push down toward $18 over the coming months (between 5 & 6) - I don't rate this a high chance but a chance none-the-less. One factor to account for is the deferred SPP has given smart money even longer to set up positions (hence why I've run fib levels off peak at $37) so the move lower could be violent...

Although I'm quite bearish on APT ST I still believe it has strong fundamentals LT but you cannot fight market forces such as a heavily discounted SPP offer.

All info provided are from the charts you all have access to and can be interpreted however you choose to.
My opinions are mine and mine only.
I implore you to DYOR and look further than pump squad or the downrampers to form your own opinions.

Although APT is a good stock it's not a unicorn and hope certainly is not an investment strategy.
SPP dumps are real...

Good luck and trust no one on forums.
The market is to make money not friends

Expand

Great analysis. Appreciate the effort. I won't suggest anything to with other SPP on other stocks, however my view on this situation is below for comment.

The major difference (& hardest to factor) is that previous SPP were run in conjunction with institutional capital raisings (don't forget the institutional capital raising - 10x as big as the SPP - in June was at the same price as the current SPP being offered at & was to run in conjunction). You are also seeing today's price at a far more significant premium to the raising price as June announcement & most recent raising at $28.00. Your retracement after raising as speculated above has already occurred in my view - in the period after the June raising.

Personally, I think the biggest chance of a retrace towards the SPP price is a major change in sentiment (a la prior to Xmas last year). This may happen if any of the following happens -
APT announcement missing growth forecasts - not sure there will even be an announcement between now & SPP close - so this risk would appear to be minor - though becomes more significant towards HY results in Feb.
US & China halt trade talks
Jeremy Corbyn is elected in Britain
Australian GDP inputs for the current quarter significantly deteriorate

If there are further positive changes to sentiment, I believe this is one of the greatest arbitrage opportunities for retail holders we will see, not forgetting holders have until early-mid Jan to make a decision & can sell their entitlement (or matching holding as soon as allocated if price is still above SPP).

APT Price at posting: $29.90 Sentiment: Hold Disclosure: Held
4 Upvote

0 Great analysis

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