Monday will tell if Friday's price change was a false start or the start of a rerating. If it's a false start it'll be back to 6 cents. If it's a rerating the volume will be around the 20+ million shares and the price around 7 cents or more.
With so many punters in the market cashed up from so many stocks running, and with the number of undervalued stocks decreasing each day its inevitable that AAR will run. When it does it will run hard as all stocks running have done lately.
If AAR is being rerated by the market it could reach 15 - 20 cents within 1 to 2 months.
Does this sound stupid?
Look at the following stocks over the last 6 months.
Within the last 6 months all of these stocks have been priced around AAR's price. The market has considered them equal in value. Over the last few months each of them in turn has had a sudden and dramatic price increase up to around the 20 cent mark or more. AUZ and MPO are still in an upward trend so they could potentially hit the 20 cent mark in the near future. None of these stocks has made a major discovery or profit increase to justify the price increase. The market is just prepared to pay a higher price for them on expectation. None of the stocks in the list are superior to AAR. In fact in the near future AAR has the highest income generation potential of them all.
At the moment we are in a bull mining market. People every day are making substantial profits on one stock or another. Making money is addictive. If you make a profit it emboldens you and your prepared to take risks. You want to get onto the next hot stock. If the AAR shares start to move the buyers will be queuing up. AAR has significantly underperformed the mining market this year its down 30% from 7.7 cents to 5.7 cents while many up stocks are up 10, 100, 500%. Consequently most (or all) short term traders must have exited this stock and only those with a belief in its longer term value remain. Though there's 500 million shares on issue I guess that 200 to 250 million at most are in play, i.e. people prepared to sell at any small price increase. If the price starts to move significantly then the day traders and the sheep that follow them will have to buy back in which could see the price increase quite rapidly. When a trading frenzy occurs you'll see 50 to 100 million shares trading in a day.
If a stock price goes up fewer people sell and more people buy and the price goes up more. The more a stock price goes up the more people buy. Its plain human nature - greed!
With presumably over 10 million dollars to come from the Mandilla West gold sales, exploration starting at Mandilla East, followup of the uranium potential at the Dalgaranga Project, progess with the Koongie Park PFS. Not to mention potential suprises, i.e. an acquistion or joint venture partner for Koongie Park. There should be enough postive annnouncements in the near future to keep the price bubbling along.
AAR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
