Technically and fundamentally...a wonderful place to be.
It took about 1.8m shares to knock the price down to 14c this morning (on the back of panic)…in fact facing the breeze at 13.5c for a bit...but importantly it took just 4.4m shares to effectively bring it back to "facing the breeze" at 15.5c.
Whilst the charts will show a physical swing of 1c...more importantly, the underlying move is closer to 2c in real trading terms…even more significant considering the significant swings intra-day on the XAO and wider nancy-pants view of many of the uninformed dweeb “chasers”.
In short, today we have seen one of the biggest underlying swings yet in relation to volumes traded.
lol...welcome to the purple patch!
This relatively low volume/large move “patch” is more or less what I have been suggesting would happen about now…from 15c+ in fact…and whilst such periods are important for any stock, for CVI at this time, especially given the historic significance of tonight’s closing level, I feel we are on the verge of a significant move.
Apart from being the highest close in the recent rally, it is also the first time we have done so with no immediate resistance level ahead…indeed, we have numerous support levels, all recently tested…and confirmed…but no resistance. Just lots of safety fall-back levels.
I keep saying, this has the potential to be a very special run…not only because of the clear value equation here, or because of the obvious incentive for most serious supporters to hold, nor for even non-supporting sophisticates who can see the obvious “play” here, but also for management and ultimately the project itself, which becomes even more viable the higher the share price goes…and by extension the company’s capacity to raise finance.
In many ways, the higher the price rises, the more valuable the stock becomes…strange but true! Perhaps the best example of this phenomenon is found in both PDN and FMG…where in both cases, the higher their respective prices went, the more secure and more viable the whole mix became…higher prices generating higher prices!
This is not an uncommon scenario…NDO and MPO are also good examples of incentive driven price lifting from less than viable levels…but where CVI differs from these two is the fact virtually no-body involved in this stock gains to benefit with the price held back…which could not be said of either NDO or MPO, who were often “managed” on the back of meeting “placement” targets, regardless of the undying desire to to eventually lift the stock.
I am sure we will eventually see such a time for CVI…but probably not this side of 40c!
There is however one incentive I can see to prevent the price running much higher…depending on the timing of events…and that of course is arranging management’s “exposure” to the company, which it appears has not been organised yet. We saw it in MPO with “issues” at 8c or so to management (when the price was 13c)…and I suspect we will see a similar scenario here…with my full support by the way!
In this regard, if we look at the recent rally to 14.5c (back in early August)…and subsequent rather forced retrace to 9.2c, in relation to the timing of recent management changes…I would not be surprised to learn their “exposure” was set at this time and at those levels (possibly with unlisted options), after which the price was free to rally.
In fact, this is the only time I can think of where real selling pressure has emerged…since the exit of the Singapore interests that is.
The amazing thing in all of this as that as of tonight’s close, CVI’s fully diluted market cap is still less than $40m, versus NDO’s $270…and MPO’s $190m.
Even if we double CVI’s share register, which will more or less get them to production at Cameroon…and pay for the acquisition…their grand total market cap (which would also put them on a more even footing with both MPO and NDO on a cash reserves basis)…we still only get a total market cap of some $80m.
Triple this and they are still less than NDO and just above MPO market caps…and that is just for Cameroon…you can almost add this again for their uranium/base metals interest…and of course, double it again for decent additional oil interests in Angola.
In my mind, numbers over 40c provide the obvious “working targets” for significant capital raisings…but of course, no one will entertain such numbers unless serious milestones are met…in light of which I refer people to the individual experience and capacities of key management.
Cheers!
CVI Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
