We are all punters, long or short and it is difficult to know when the bottom arrives, but it is damn enjoyable and rewarding when you get it right. I am not here to earn likes. But I find nothing more challenging than the stockmarket. I do it for the mental challenge. You only need a trading platform, experience and your mind. It is the best profession there is. Give me something to analyze and I will analyze it thoroughly, even if it doesn’t make sense initially or even if it appears irrelevant initially.
The current decline in FMG reminds me of the dog stock, NCM and its decline late last year and its bottom during this same time last year. One is iron ore and one is a gold stock but both involve digging dirt. As NCM was approaching a bottom, negative sentiment, negative views, news and anticipation of “highly dilutive cap raisings”, collapse, plunge in share price was extremely abundant.
Anyway, just a note on the final low of NCM at that time. It was 23% below the first low during June 2013. Went below the first low by 23%. Then came an 80% return. Yes, after all that rubbish negative sentiment and shorts motivated crap, came the money shot of 80% return in the 3 months to follow. Who would have thought? Who? The instincts of the bulls at that time of maximum negativity in gold price.
What I am saying is that we could be in a similar position right now with FMG. And in the next 3 months, FMG is open to anybody on the planet for an 80% return. That is, FMG back to the $4.00 level.
So, bears, be bearish as you wish, but don’t be fooled as significant rebounds have happened and can happen with FMG.
Applying that -23% protracted and relentless decline of NCM beyond the June 2013 first low and assuming similar psychological exhaustion, you get $6.96/$9.07=0.767x$2.87=$2.20, as a possible FMG low. Yes, there could be one last plunge in FMG price that will clear out all weak hands. Interestingly, it is a price similar to what CoalKing talked about late today as being a good buy. And in CoalKing’s words,
“might have one final plunge to hit the stop losses, reckon $2.18 is good buying if it gets there before Christmas”. Very similar to NCM hitting a bottom before Christmas last year. I don’t know the dude as many of us don’t know each other and although bearish, I have found CoalKing’s posts smart in nature.
According to the feeling of yesterday and today, we could in close proximity of the bottom now, but long holders should not discount $2.20 and be prepared for more just in case. Be prepared but also be strong and remember that Directors have been buying around $2.70 levels.
Good luck to all holders.
Below is chart of FMG now and NCM last year.
(20min delay)