update

Hi Guys

There are a lot of new posters on HC and we again are revisiting and rediscovering a lot of information that has been discussed from TA and fundamental perspectives. I have been posting for a long time and I encourage new posters to read Bigstar, Westcott and Sidswingerhead to get a feel for things. For those who have been following, I mentioned that I would post an update. I hope that all have hung in there as there were a few windows where TA guys would have been shaken out.

So, without going into the minute details (if you are interested, read previous posts on the intricacies of the fundamentals and trading behavior previously posted), I note the following.

Firstly - this is a major test of resolve tomorrow, that is acknowledged.

Here is my take:

1. From a TA perspective, many conventional traders will see an overbought position. If this is the case then it will be very short lived.
2. If you accept that there has been a channel shift (call it revaluation) and that we are in the third leg of Elliot Wave up (I think this is the situation as we had a retracement failure at .47 at high volume - very significant and bullish) then we are trending to higher levels than .57 within a week IMO.
3. Fundamentally, SDL if you look at the sovereign advantage with Camaroon and Congo govts having significant shareholding and comparing it to other companies on a enterprise value basis - the stock is undervalued. Instos will be driven by getting set.
4. Recent info shows that West Africa is the new province and the Chinese are into it. SDL has first mover and infrastructure advantage right now.
5. TA wise, I am also of the view that between now and March, we will see finance/offtake announcements. (Ples permits, resource ratification etc...) I am confident that the catalyst mover will be sooner rather than later. If you plot where we are now, to where we will be even on conservative broker vals, then the current "spike" up forms a neat channel. remember that earlier announcement anticipation will make the chart steeper.
6. A big run can continue more than you think. Look at GIR. 2 years ago .40 Now 4.36. The trend is your friend.
7. We have had a few technical overbought signals if you do not look beyond the standard TA thinking and discount the "revaluation" channel shift factor. This is where the traders exit and the big players enter. I bet that .45 shook a lot of people out. These guys are waiting to reenter on a pullback.

IMO, the next few days may we expect some volatility (could be intraday, but doubt whether it is a tradeable opportunity). One way to look at it is this. The upside is .57 - .78 (I wont go into the TA of that SP point, will do another time). So that is an upside of .21. A retracement is likely to fail quickly and above the break of Friday. Call it between .02 - .045. So the question is a risk/reward one - and one that is pressured by time. The high support volumes indicate that some big players are getting set. This is not a stock that seems controlled by traders.

Tomorrow will be interesting, hopefully my post will give a perspective that is helpful to those who feel unsure at the moment. As I posted before, the resolve for the investors will be tested as we move towards greater range days. The only way through is to understand where you are heading and the big picture.