When EGO rallies, bullish traders will have you believe that it...

When EGO rallies, bullish traders will have you believe that it will keep on going. BOT-like trades will high-tick the stock (such as the recent low volume up-ticks we saw at 45), with smart money selling into any subsequent buying. Similarly, when EGO falls, out come the Prophecies of Doom, low-ticking occurs, and the smart money steps in to accumulate (ready to ride it back up). Then rinse and repeat.

We seem to be in a 35-45 range (probably more like 35-42.5, as there was little volume between 43 and 45), and at the moment the amount of bearish comments outnumber bullish. The opposite was true when we were at 42.5, with bearish posters quite silent, and bulls taking control of forums. It seems that when bulls do take control it is reasonable to assume that it is toppish, and when bears take control it is bottoming out.

Lots of talk about 31st August, as it on 1st September a new sun will appear on the horizon. It won't. But what will happen is that the cloud regarding previously financing arrangements vanishes, and we then turn our attention to the only two questions that really matter: (1) will MIN make a move, or wait for RGN1 (and hope they can do a cash-for-gas deal to finance a new plant perhaps), and (2) will RGN1 "go our way" and be proven (certainly, EGO continues to call it "low risk", and continues to cite the cost of recasing and retesting as minimal given their assessment of the risks).

September has 22 trading days, and as each one passes we are one step closer to the "early Q4" recasing and retesting of RGN1. Even if MIN weren't in the picture, RGN1's potential impact is significant for EGO as it not only increases the valuation of Empire but also signals to potential farminees EGO's ability to deliver. Yes, all the doomsdayers will point out that the share price is much lower during the past year, but the reality is that everything that could go wrong did go wrong, so for EGO to come out the other side with positive cash flow, possibly two producing wells, and a valuation twice the current market cap tells you that the punishment the market has given the share price is perhaps slightly unjust. In my view, success at RGN1 will "unwind" some of that sizeable discount (between market cap, at circa $36 million, and risk-weighted valuation, at around $75 million). Success breeds success.

For my money, the "noise" we see now - versus even three weeks ago - is a good sign. Read into that what you will.

Best regards to all holders.
Kit