In my opinion, what we have here is an alignment of several rare events...any or all of which could result in a significant move on their own, but together, increase the likelyhood almost exponentially.
In answer to your question however, most of my contingencies are for much higher prices, ranging from the low 6's to the high 8's over the next week or 2.
Higher prices however would not surpise in the current environment.
Technically, 6c is important from a psychological point of view, but the important number for me will be 6.2, 6.4 and 6.7c...I will be watching market reactions around these numbers very closely.
Perhaps the best way to explain the situation is to compare it to tornado...a little motherly I know, but still an interesting comparison.
The path of the tornado represents the underlying trend...in this case up...and the winds generated equate to the volumes trading.
When the tornado (trend) first hits, the winds (volumes) begin to increase, but initially only the very loose stock gets blown around.
As the tornado continues on it's path, the winds increase further and some of the more tightly held stock gets dislodged...this increasingly volatile period continues until a point is reached where eventually, there is very little loose stock left.
At this point, the winds (volumes) drop off somewhat and we enter a period of relative calm...the eye of the storm!
I think we are about to enter this phase now?)
Anyway, the tornado continues on it's original path (trend) in relative calm (low volumes)...depending on it's size and strength, this period of calm can continue for some time.
Gains of 10-30% are quite possible in this period.
Eventually however, the trailing edge of the tornado approaches and once again, the winds pick up and stock previously secure but perhaps loosened by the leading edge of the storm, finds itself being tested yet again.
This trailing period of volatility, as the tornado gradually leaves the stock, is effectively the final test of any remaining loose stock .
Once it has passed, there will be a completely new landscape, with stories of devastation for some and good fortune for others.
As a general rule, most shareholders who survive such storms tend to stay put, heralding in a new era.
Cheers!
AEX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
