Its Over

Originally posted by 1ronnie ↑

https://www.cnbc.com/2018/07/02/gol...ing-to-be-difficult-but-these-stocks-wit.html

I agree it is going to be a more difficult second half- IMO the risk is starting to outweigh the rewards and a reduction in equity exposure is probably called for. The ASX small and microcaps have been lacklustre and more recently mixed - can't get too excited with some recovery because it is unlikely to sustain and CR for some is around the corner.

In the absence of announcements ahead of 4C due shortly, some pundits rely on charts but at the end of the day, the charts reflect stock sentiment and sentiment can change course quickly; stock outlook (with or without announcements) will be a more sustainable indicator of sp direction. And for a lot of tech microcaps, not much is likely to change in the immediate quarters which can place some pressure on sp in the month ahead. Read between the lines when the 4Cs do come out!

At this point with uncertainty around global trade tensions, the falling China market and rising global interest rate outlook, it is best to err on the conservative side. Buying into 'one trick pony' exuberance on promising market announcements (without tangible concrete revenue ramifications) is IMO a sure way of losing money. Take care!

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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.