mass psychology

Fear and greed, that's how these things work right? Especially with explorers. I'm sure if you go back and read the posts that were circulating when NSE was pushing 70c you'll see a lot more exuberant blue sky optimism than what is being thrown around here at present. Now I see disdain for management, pessimism and fear.

The undeniable reality is that you would have lost a lot of money if you'd bought at 70c. It's generally (but not always) like this. When everyone is screaming blue sky, you sell. When there's blood on the street, you buy.

What do I see when I look at NSE? I see a stock that ran ahead of itself. Buru started to come to market with some exciting news and NSE was simply in the hot seat as Buru's less developed next door neighbor but had no solid news of its own to justify its share price. It was nothing but exuberant optimism and hope for good news, which didn't come. So what happens in these situations? A big fall, of course. The optimism turns to fear, the stock starts to fall and then, as more and more people grow further into the red, more and more people push the sell button - and so the optimism unravels, more often than not to levels that reflect an overly pessimistic picture of reality. That's how the psychology of the market goes. Over optimism to over pessimism, and herein lies the inefficiency that allows smart investors to consistently beat the market.

What has happened with NSE?

The chart tells the story quite clearly. In mid to late 2011 the smart money piled in below 20c after a big fall from 30c. In early 2012 everyone else piled in and then the selling started from 80c downward. Now, here we are at 20c again. We're seeing volume spikes but no share price falls - that is generally a very good indication that the smart money accumulation has started again. The fact that this coincides with the mass negativity and dissent that I am reading on this board only further adds weight to this being the bottom before another run into optimism, exuberance, blue sky.

Judging on the chart i'd say to around 90c to $1. If you want some kind of foreseeable fundamental rationale for this i'd say the commissioning of a new drill and positive drilling news? Positive lab analysis from the first drill? Not too far fetched if you ask me.

The name of this game is to stop your emotions from clouding your judgement. If you take a look at NSE with a pair of fresh eyes it is clear that the smart buying has recommenced and it is no surprise that this comes after a string of bad news and during a time of shareholder discontent.

Writing is on the wall. Won't be long before this pops again.