Here’s how I see it (FWIW)… I think the drop has been caused mainly by charts. Yesterday the RSI hit 85ish (70 is overbought and 80 is very overbought). Also, other chart indicators such as MACD and slow stochastic are looking ‘toppy’ also.
If nothing else, this recent rise provided some light relief for what has been a bad few months since November. Is the rise now over? I think it probably is while the chart corrects itself. Some people will be taking 30% profit and who can blame them for that?
So what now? The interesting thing will be where the SP now bottoms… If it’s above 70p then an uptrend will be established. If not, then we ‘may’ test new support levels. Although support should also be offered the closer we get to PFS.
The recent rise may have been people getting in ahead of the crowd for PFS, or it may have been due to the gold price rally, or both. Personally, I won’t be getting excited about gold until it breaks the $1,425 resistance, we’ve seen gold rally from $1,200ish levels before only to see it peter out later.
I have to say I partly agree with BSmyth (no matter their intentions, persona or otherwise). The recent rise reminds me of the rise from 90p to 120p around May/ June last year (the chart is currently looking very similar), the SP then fell below the start of the rise, to 75p. I’m not saying that that will happen again, but merely that it could do. PFS is still a while off, especially as we have yet to see any news regarding the completion of the on-going studies required for it.
So PFS, what’s in store for us? I think the PFS will come out with an NPV somewhere in the region of £4-5, so where will our SP be as a result? Well, currently I think shares like ours are trading at 20-30% of their NPV valuations which would put us at 80p (£4 x 20%) on the downside and 150p (£5 x 30%) on the upside. The probable reality is that we find a level in between those values.
Personally, I only see a good rise here (to 150p and beyond) either because of a sale or a major sector recovery (gold through $1,425 like I said about earlier), or both.
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