The last time EXT had a price rise like last Friday was on Friday 19th March 2010, when it rose $1.08 in a day. Opened at $7.27 and closed at $8.35, for a gain of 14.86%, on a volume of 1,115,500 shares.
The reason for such a rise then was three fold:
1. It was the third Friday in March, which is a settlement day that funds used to balance their portfolios. On these days there is usually a great deal of activity around the closing price auction.
2. There was a report out that day that Korea Electric Power Corp. and state-run Korea Resources Corp. may make a joint bid for a stake in Extract.
3. Finally there would been some short covering buying, to top off a perfect storm day.
As you say after that rise the SP slowly continued its downward trend.
While there maybe a sell down on Monday, I think it will be short lived, as there were none of the above reasons for last Fridays rise, except short covering.
Also over the past couple of week the number of daily short sales has dropped from 20-30% of the daily volume to below 10%.
The net outstanding short sale have also dropped from around 2 million share to below 1 million since the end of September.
The reason for last Fridays rise is simple a buyer or buyers were prepared to keep buying stock despite the increasing price.
Who the buyer is, only time will tell?
As a very knowledgeable poster on another BB posted the following recently:
"With ERA falling short of its 2010 production target, and Rossing being down too, Rio's U3O8 output for the first 9 months of 2010 is only 8.1Mlb, against 10.8Mlb last year. I expect Extract will be putting financing in place for building its 15Mlb p.a. mine within the next few months. Rio does not have long left to act, if it wants to remedy its declining uranium output. Once Extract has its financing in place, the financial backers will demand a very high price to relinquish their stakes (one that is likely to be out of the range Rio could justify to its shareholders)."
The end game may have finally commenced.
Regards
Steve
EXT Price at posting:
$6.90 Sentiment: LT Buy Disclosure: Held
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