Ok lets have a back of the envelope look at MGV from a technically volume based perspective. Please note these are my rough guesstimates from just looking at a basic chart. If you really want, you can have a closer look by pulling up VWAP and other specific data. Basically around .60 offers great buying if you believe in the fundamental story as your technical downside risk is limited at around the low .50s. On a risk/reward basis, 15-20% downside risk versus around 100% upside if you believe the fundamental story that MGV will strike it again with repeaters to Starlight and/or will get taken over. Obviously there's risk in everything, but from the above, its pretty much a no brainer for the speculative junior resource end of the market.
Background - about 500m shares on issue - early June announcements kicked-off a month of re-rating (Period 1) - late June/early July announcements fired it up for another month (Period 2) - late July announcement polished it off and caused it to settle over a couple of weeks to date (Period 3)
Period 1 - churned around 345m in volume - predominately around the high .30s to early .40s - so I would say this is a heavy support line at say around .45 as nearly 75% of shares traded
Period 2 - churned around 120m in volume - predominately around the mid to late .50s - so I would say this is a medium support line at say around .58 as nearly 25% of shares traded
Period 3 - churned around 70m in volume - predominately around the early .70s - so I would say this is a soft support line at say around .70 as nearly 15% of shares traded
Periods 1+2+3 - churned around 535m in volume - predominately at say around low .50s - so I would say low .50s is the absolute line you should watch. If it ever breaks it downside, then there is a major fundamentally negative issue. technically low .50s should never be breached given its traded the whole free float around this price level.
MGV Price at posting:
61.5¢ Sentiment: Hold Disclosure: Held
