the week ahead

Last week was an interesting one for EQH. After cracking the century & setting a new high at $1.03, the stock closed offered at 87c, the good old devil’s number. So, what entertainment will EQH provide for us this week?

Assuming that my theory is correct & that EQH has been accumulated by “in the know” buyers then it would seem to be very naïve to think that they have depleted their buying leaving the stock will fall in a vacuum. What is more likely is that the buyers have pulled away to see how tight the stock actually is. After all, it has run from 19c to $1.03 in a virtual straight line & needs to correct. The question is, to what level? And that is where the “problems” begin.

I am not a technical analyst, even though I do respect the art & consult with one on a regular basis. As EQH is still a “young” stock, there is no history from which to provide price targets. In effect, EQH is making its own history every day. The current correction is the first proper correction EQH has ever had. This is healthy & should also help provide some chart targets.

If the buyer for 150K at 82c stays, I believe that will be the low point of the correction. Given that the last 2 days trading comprised about 60K shares, the buy order at 82c should be sufficient to hold the market for at least 2 days. Assuming EQH traded there it would also fill the little gap between 82c & 82.5c which would be constructive. Also, when people see that the bid isn’t a prop & the buyer is serious, it should provide confidence to the market.

If the buyer at 82c pulls his bid, it may provide a bit of panic selling & a 38% Fibonacci retracement of the whole move from 19-1.03 would give us a target of 71c & all relevant gaps would be filled with absolutely no damage done to the medium & long term technical picture for EQH.

The fact is that other than the announcement about the 20%/royalty return, EQH has announced nothing of substance. If Oyabi is moose pasture then the 20%/royalty return is not worth anything. If there really is something at Oyabi, then the 20%/royalty return is a really substantial “gift.” We should have some idea of whether Oyabi is worth something once the aeromag results are published, which should be any tick of the clock.

Is the game over or is it just stopping to draw breath before taking out its highs & setting new ones? I suspect the latter. Even at 80c virtually everyone is making huge profits in EQH but the words of George Soros keep reverberating through my head, “It takes courage to be a pig. It takes courage to ride a profit with huge leverage.”
I see this pullback in EQH as a buying opportunity for anyone not already on board or an opportunity to top up their holding for someone already on board. $1 on almost any stock is a psychological level. EQH reached it and is now taking a bit of a breather.

When I invested in EQH, at least as I saw the facts, all the signs pointed to this being capable of being a 10 bagger. The current correction is expected, overdue and constructive. The price action thus far has only confirmed my analysis. Once EQH resumes its rise, then I suspect it will be even tighter than it is today (hard to imagine) and then the price action will get really interesting.