The Bull Recommendation, page-73

So, what could be driving this sudden jump in the share price?

Cash flow from operations this year is forecast to be just $5m (-$2.8m after capital expenditure of $5m) and despite an NPAT of $12m to $20m there was no mention of a bottom line profit figure or a dividend, then there's also the probable $5m downgrade on international sales. So, nothing on the metrics to inspire a buying spree.

Maybe an announcement is on the way telling us the Shilongba Reservoir demonstration project was successful and that we are moving to a full scale rectification program on Lake Dianchi. But if that is the case surely management would have had a sniff of that in advance and raised the 2020 sales figure from $50m to $70m to something much higher but they didn't. Perhaps a big contract outside of China is on the way. Both of these possibilities seem unlikely given management is sticking to a production figure of 20,000 tonnes this year.

That really only leaves market sentiment as the likely driver of today's rise and I'm skeptical of that given the way the share price has been stagnating recently. PET's chart below indicates the downtrend in place since September last year is about to be broken and we also have an "Adam and Eve" formation, perhaps also a cup and handle both of which hae a top of 62.5 cents, a move above this level would suggest a projected target of 87 cents and an intermediate target in the mid 70s.

So, what's behind today's rise...is it simply a reflection of overall market sentiment and China getting back on track...does someone wants to buy us out...is a merger on the way...does a major player like one of the new cornerstone investors or a sovereign wealth fund see something down the track that we can't...or is this just a technical move on the chart driven by traders?