Hi Westie,
I recently came across a poster on the commodities threads (goldbear77)who sometimes uses a simple chart analysis using only volume and money flow indicators. I've been playing around with this method for a few days and thought I'd apply it to WBT.
View attachment 2812442As you can see its a stripped back basic chart. I've chosen a weekly Twiggs Money Flow as this smooths out trends especially at longer time intervals, and a daily Chaikin Money Flow for more detail. Values above zero show accumulation and below zero shows distribution.
The above chart shows major accumulation between Aug and Oct last year. Volume was high and as I don't think insto's were a major player at this stage I'm assuming the majority of stock went into retail hands.
From the end of Oct till the end of Dec the SP went sideways with the SPP capping price movement. Volume faded away and accumulation transitioned to distribution.
At the back end of the year the SPP was massively over subscribed and WBT entered the S&P/ASX All Technology Index. The SP re-rated probably due to both retail and sophs not getting what they wanted in the SPP, possible index fund rebalancing, and good ole FOMO. The BEOT took an interest and BOTS started breeding in dark corners. Interestingly, while the short term money flow indicator showed increasing inflow, it wasn't enough to drive it above zero into accumulation and the longer term indicator showed minimal movement. At a little over $3 momentum was lost, volume fell away and we've drifted since. IMO the limited and tightly held SOI played a pivotal role in the rise with moderate volume translating into increased volatility and large movements in the SP.
However the subdued money flow indicators would seem to suggest that the big players-who I think would be having the largest influence at the moment-have yet to bring their A game to the table. I believe a significant part of the volume turnover is them buying and selling to themselves. They aren't committing fully yet, just quietly and slowly accumulating a precautionary position in case this Weethingy actually works at which point they'll have a base to launch from.
So what does this mean going forward?
Basically I think we'll continue to drift for a while until we get significant news. The longer the wait the lower the SP will drift as retail loses interest. If the money flow indicators start diverging i.e. they head down while the SP is stable or rises modestly, then its probably indicating the insto's are exiting. To be clear I don't think this will happen any time soon but I'm trying to interpret possible outcomes from this limited data.
Please remember this is only my take on this and I'm sure many others will have issues with some of my conclusions but I think the most valuable insight to take away is being able to look at the SP movements from a completely different perspective and to compare the conclusions with what you previously thought or read on HC.
I've recently read about tightening springs and dramatic rises but looking at the above chart I don't see that yet. Happy to be wrong about that of course.
If we do retrace down to 2.60 or so it could be for the best as a wide range of indicators would have a chance to cool in anticipation of major news which will bust this baby wide open. AIMO. DYOR.
Cheers
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