Resource stocks completely out of favour and likely to remain so for the foreseeable future.
One should look no further than the IO industry and the performance of the juniors in this sector over the past 12 months for a snap shot into how the graphite scene may play out.
IO - Chinese construction boom fuelled a massive increase in demand - price spikes encouraged exploration and expansion and eventually the oversupply we are seeing now.
Graphite looks to be no different except for the fact that there is no real increase in demand - the hype is based around speculation of future demand from emerging technologies and battery use expansion.
I'm still in as I'm hoping Brad can bring home some kind of off-take agreement in the short term which is likely to prompt a re-rate. Graphite is a risky place to be in the medium - long term however and caution should prevail.
Tight stops required below our current level because if it drop lower, the low teens beckon. Conversely an offtake or two could cause swift movement in the opposite direction.
