Hi Messy - This has happened to me a fair few times when stocks...

Hi Messy - This has happened to me a fair few times when stocks improve their FA but their TA falls in a heap. You scratch your head as you cannot believe how it is possible, yet the SP continues down. One rule I always stick to is that the SP will come down to a placement price and often below. Not every single time but the probability is exceptionally high. There is a great chart that shows the typical lifecyle of a resource stock from early blue sky when brokers are ramping to production. The chart shown a strong impulsive trend up and then it raises more cap as it gets closer to resource definition/production and during which the SP retreats. Later we find out why. Not always of course - often it is the relentless cap raising/dilution. I also used to work out the enormous potential of a company - I was very heavily exposed to Sundance (SDL), but not now. Again, massive resource but lots of issues and problems that seem to drag on forever. ABU could drop lower if the POG drops (which could given that the US economy and everyone is so bullish) as it is an explorer and it is a margin play. Just my experience. I am still bullish long term and will buy more on the next leg of weakness if it comes but at the moment, the price action is telling us that this is not a bargain play yet.