Hey Vendor!Mate, I can't find anything to disagree with there...

Hey Vendor!

Mate, I can't find anything to disagree with there really. At the moment I have to say that I think channel trading is one of the few strategies that really works.

My only caveat to that statement is that once a channel is broken and a new trading range established, it's anyone's guess what other factors come into play. I'm being a bit glib in saying that, of course. For me, pros and cons around the possibility of a SP jag solidly into the 50s:

PRO:

1. Mac bank and the immediate threat of on-market selling seems out of the picture
2. The phase of action established post cap raising seems to be ended, and we're now in terra nullis. Frankly I think fib levels and so on are largely irrelevant at the moment as there is no traditional support/resistance in this zone at all, and one can't compare SBM's dynamics post cap raising with those before.
3. Because of the unusual gap down after the cap raising, and the stock being largely valued on a distressed basis (especially after Ed was margin called) this company has not been trading based on traditional metrics at all. There was clearly blood in the water.

CON:

1. Nervous market. Many investors have adjusted their cash management strategies. Once she looks like topping out that may well become a self-fulfilling prophecy as people bank profits. Add to this that the POG is possibly spiking too hard at the moment. If it retraces, may precipitate a percieved topping out.
2. Following on from 3 above, the market seems uncertain exactly how to value the stock. Value has been added via the removal of the above negatives, but how much value exactly? Is not having mac there really worth a 20c (50%) premium to take her to 60c? Why?
3. There are still ongoing operational concerns, for me at least around the cash costs of the co. Taken a back seat for now.

I have to say I'm absolutely with you in hoping that she keeps on going up before finding her new range. Today was a very pleasant surprise. You won't hear me complaining if she does that. I pyramid in on an uptrend if I have a good feeling about it, and I do here.

That said, I'm concerned that broader market sentiment will put a slowdown on more promptly than might happen in more secure times. I'm sure many of us have adapted our strategies from buy-n-hold to active trading over the last year or more, and we're seeing increased volatility all over the shop as a result. Severe spikes and dips seem to me to be correcting or at least arresting quickly in many stocks at present.

My 2c only. And to be honest, a lot of that is gut feeling rather than strictly logical.