Boart Longyear has fallen by $1.80 in five months. That is an...

Boart Longyear has fallen by $1.80 in five months. That is an average of 30c a month or a cent a day including weekends. If that trend were to continue then the shares would be zero in seven weeks. Clearly that is not going to happen particularly as the company has already rearranged its finances with the banks.

It has to break the downtrend during that period and shareholders are thinking about it right now. Several similar stocks have turned around and when they do, it is a big rise e.g. Maverick, Imdex, Ausdrill and perhaps most important of all the big one, Leighton which has jumped 20% from its low point just 17 days ago.

Boart Longyear has massive shortselling and those guys must be starting to sweat. The shares short sold have dropped from 46.9m to 44.7m in the last three short position reports from July 2nd to July 5th. The reports are six days out of date but it seems clear that the short selling has stopped and is likely to continue reducing.

Gold has had a strong run over the last few days, iron ore remains solid and even the base metals are looking better today. In these circumstances surely an 80% loss in BLY's share price in five months is way too much.

The stocks in this sector with large debt are the ones struggling to change their trend right now. BLY and Emeco have been left behind and I presume their debt is the reason. But when they do change directions, it's going to be fun to watch. And I don't think it is going to be long before it happens.

GPASAS