Priced for Administration, page-5

First 5 Last

Share
Profile

Follow
tutes

3,289 Posts.

671

18/02/16

10:38

Post #: 17050704
Share

Originally posted by moodymemphis ↑

To understand the shakeout, it's helpful to be familiar with another market phenomenon called the "guillotine and the sandpaper." This was first described by legendary market analyst Bob Farrell…

You start with a dramatic drop. Prices fall 20%, 40%, even 70%. That's the "guillotine." Then comes the "sandpaper." This is a period when prices move up and down without going much of anywhere.

This go-nowhere action exhausts nearly everyone who is still left holding. Eventually, they give up and sell. When there are no sellers left, prices can start to rise.

When shareholders refuse to throw in the towel, though, the sandpaper phase will sometimes end in a shakeout. The sharp decline "shakes out" a final group of shareholders. And it reduces resistance to an upward move (because there are fewer sellers to push prices back down in a rally).

That's what just happened with gold stocks. The guillotine. The sandpaper. And the shakeout. As I said above, the rally that followed took GDX 51% higher to a seven-month high.

LETS HOPE THIS HAPPENS TO A R I

Expand

what about when the price went from 70c to 40c? that was a "guillotine" drop of 40%, it's drifted lower ever since to now 4c

i really do hope ARI recovers from this, but i am also concerned that the IO price has recovered somewhat the past few weeks, i'd hate to imagine the IO dropping again and it's effect on ARI

ARI Price at posting: 3.7¢ Sentiment: None Disclosure: Not Held
4 Upvote

0 Great analysis

Reply

Top Stories

Wealth Within weighs in on shock 4% inflation read – and stocks that could survive the gloom

Microcap Wrap: 5 explorers with news out today

RCE

Recce's R327 found effective against E.coli during clinical trial

SVL

Silver Mines models five new calderas close to 396Moz Bowdens deposit

LU7

Lithium Universe (ASX:LU7) board visits Quebec to engage key stakeholders

CMX

ChemX Materials kicks off first stage works at WA high purity alumina pilot

LRV

Larvotto identifies new exploration target at NSW's Hillgrove, boosting shares by nearly 20%

Week 26 Wrap: Cerberus of inflation barks – rents, electricity & fuel – and world watches two elders bicker

AVA

Ava Risk Group expands US presence with A$0.7M Substation Deal

SS1

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

There are more pages in this discussion • 206 more messages in this thread...

First 5 Last

Add ARI (ASX) to my watchlist

Priced for Administration, page-5

Top Stories

Wealth Within weighs in on shock 4% inflation read – and stocks that could survive the gloom

Microcap Wrap: 5 explorers with news out today

Recce's R327 found effective against E.coli during clinical trial

Silver Mines models five new calderas close to 396Moz Bowdens deposit

Lithium Universe (ASX:LU7) board visits Quebec to engage key stakeholders

ChemX Materials kicks off first stage works at WA high purity alumina pilot

Larvotto identifies new exploration target at NSW's Hillgrove, boosting shares by nearly 20%

Week 26 Wrap: Cerberus of inflation barks – rents, electricity & fuel – and world watches two elders bicker

Ava Risk Group expands US presence with A$0.7M Substation Deal

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Featured News