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10/07/18
13:54
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Originally posted by 1ronnie
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Its been a good green day for ASX but the same cant be said for the tech microcap space which had a fairly mixed outing today.
As I said yesterday, risk is looking increasingly greater than reward for this sector, and mixed performance and high intraday volatility makes it difficult gauge winners from losers. In essence, IMO time to stay clear.
Did caution about being excited over announcements when they seems promising but probably not materially significant for revenues.
Look at Sportshero (SHO) put on 34% this week on announcement of World Cup revenues but it was for just $50k in two weeks- is that cause for exuberance? CT1 (CCP Tech) which made a better announcement re: global services agreement with Vodafone to enable wider deployment capability of its IoT cold chain monitoring solution , rose 33% this week but a CR is probably coming which could dampen sentiments ahead and the agreement whilst promising may not have material revenue implications for yet several quarters.
Its been a disastrous week for CIO , down 27% this week despite reporting revenue growth with speculation about authenticity of their growth and accounts. 9SP continues its decline (after releasing its annual report) with a 11% loss this week looking like to return to its 2c low last week. Both reflect downward outcomes after releasing financials despite them not being out of whack from market expectations.
Then you have LNU which closed at 7.6c last Friday, reached a top of 8.3c on Tuesday before falling to 6.8c close today, a 9% rise to the top and a 18% drop from the high. And BUD which closed at 12.5c last Friday, reached a top of 15c on Tuesday before scaling back to close fairly well supported at 14c (albeit with an intraday low of 13c). And what you have here is short term exuberance stemming from influx of short term traders pumping and dumping the stock. No announcements were made by both stocks. Technical price action may be a reason to get involved but it should not be the only one- they could be a suckers rally and not for the investing crowd but day traders keen to get a few hundred bucks a day.
The mixed performance IMO does not send a good signal for the microcap space- nothing gained from an unlikely green day on the ASX spells more disappointment ahead. And not helped by POTUS $500b tariff hit on China that is soon to become reality! The carnage is ahead and yet to come. I have been involved in the microcap space for awhile now, I know what procrastination does and when to cut losses.
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The ASX majors All Ords and S&P200 made their 10 year highs yesterday unceremoniously (because we didn't FEEL the bullishness); the banks recouped their losses after the Royal Commission but still below where they once reigned supreme, which gave the index the boost. But alas, for the smallcap space, you wonder if there will ever be a party again - if not now when the indices are at their highs, then when?
Its a stock pickers market, you'd be better off in Index ETF now than being in the wrong stocks. And stock picking is getting harder, no surety hopping on a market darling or momentum stocks.
Meanwhile China equity funds experiencing difficult times
https://www.reuters.com/article/us-...s-some-china-funds-to-the-brink-idUSKBN1JY10Y
I have been saying risk-reward is not in our favour for small caps because small caps are being ditched despite 10 year high for major indices and possibly again with a CR event and then thrown completely out when the big kahuna arrives.
Column 1
Column 2
Column 3
Column 4
Column 5
0
COVERAGE DATE
STOCKS
PRICE ON COVERAGE DATE
PRICE @MIDDAY
GAIN%
1
29/6
BYE
$ 0.340
$ 0.340
0.0%
2
28/6
ATC
$ 0.195
$ 0.180
-7.7%
3
18/6
A2M
$ 10.780
$ 10.430
-3.2%
4
18/6
CGC
$ 8.750
$ 7.585
-13.3%
5
14/6
NZK
$ 2.240
$ 2.440
8.9%
6
4/6
BUB
$ 0.830
$ 0.750
-9.6%
7
15/5
SW1
$ 0.410
$ 0.340
-17.1%
8
14/5
RHC
$ 65.420
$ 54.110
-17.3%
9
9/5
FYI
$ 0.145
$ 0.099
-31.7%
10
3/5
4DS
$ 0.057
$ 0.040
-29.8%
11
2/5
PME
$ 8.150
$ 7.910
-2.9%
12
1/5
TTT
$ 1.540
$ 2.330
51.3%
13
30/4
CTD
$ 24.880
$ 27.480
10.5%
14
18/4
CLV
$ 1.030
$ 1.395
35.4%
15
18/4
VIV
$ 0.054
$ 0.046
-14.8%
16
11/4
APX
$ 8.820
$ 13.010
47.5%
17
11/4
BHP
$ 29.440
$ 34.260
16.4%
18
11/4
PPS
$ 0.595
$ 0.890
49.6%
19
11/4
PTB
$ 0.545
$ 0.625
14.7%