RE: Here is what's going on with AFA!!! Another moDear pdcgroup,
I am sorry, I have a hard time with your conspiratory theories...
I have another, more simple, idea of what may have happen today..
First some background, over the last three years a large contingent of retail investors from Sweden have acquired a significant holding in afa.
They first started to buy. in 2007, when a blogger from Sweden made a very strong buy recommendation base on his analysis that mentioned that Block J could contain up to 10 million carats... (Don't ask me how he ever came up with does number I have no clue, since in 2007, AFA just finished it geophysical program and the previous last sampling program was done in 2002).. Well, needless to say that when the Company issued it's 43-101 report that only mentioned a potential of between 750,000 ct to 1,8 million carats, the same blogger announced that he had sold his shares and moved on to other plays...
Between 2007 - 2010, we all remember that long saga of waiting for the arrival of the vessel... but during that same period afa did re-develop a large following in Sweden..., but what ever the corporation mentioned about what could be realistic goals of the up-coming exploration program, the delays with the vessel became the most important subject in the mine of investors,and nobody really asked questions about what could be the potential results of the up-coming sampling program...and the reason what self evident every investors were focus on the vessel departure, because we all believed that once the vessel would finally leave the harbor to sample that happy days were here finally...
The problem was that nobody seemed to have had a clue about what could be consider a successful program. Some investors from Sweden were still looking for the 10 million carats original mentioned in 2007.... Even though it was clear from the communication of the Corporation that that was not the goal...So when the first result did come out, many investors, reached an erroneous conclusion about the potential of the concession and just sold in a panic.
Their panic, attracted other seller and it became a self fulfilling prophecy.. And this is where the weird and illogical trading pattern may have become even more apparent.. but with a little bid of thinking you will notice an another potential reason for it...
Technical speaking, AFA shares trade a lot and its trading pattern has enable many traders to make a nice profit trading the stock following it TA pattern, therefore you will agree that many traders have AFA on their screens... When the news came out before the market opens... many market pro read the news and realized that the news was good and that there was a strong chance that the AFA stock could go above it short term resistance level of $ 0.15, and if that was the case the stock could have move back up to
.20....
Unfortunately, the resistance a
.15 was too strong and the stock stalled at those levels...but what happen next is that these same trades realized that the trade was not working and they decided to close their book ASAP and they dumps what ever the had purchase before, and this resulted in the stock going back bellow $ 0.14...
That action was just too much for our Swede investors, and those that had keep their stock on the hope that the results would validated there decision not to sell in the previous panic, just could not wait any longer and they just capitulated and sold at what ever price the could get... Buyer being mostly traders, they just lower their ask and that just feed in the panic.
No big conspiracies, TA says it all, it just the cold hard reality of the market, were discipline traders make money. sometime and the loss money other time..
For me this simply means that AFA is way oversold technically, that it is due for a rally, and that the story is even more of a steal then before..
Regards,
Keg