AFA, going Forward...Dear Millionvester.
For me taking about the fact that the stock has mover XX % up or done since one point has been reach is fruitless and sort of self evident ...
I would prefer to have a discussion on the fundamental value of the stock, the story, the business model and the risk and reward profile. going forward....
While I understand the concept of technical analysis and momentum trading, given the choice between a stock with a strong fundamental and a weak technical outlook, and a stock with a strong technical outlook but a weak fundamental, I would chose the one with the strong fundamental. This being said, I am a savvy enough investor to understand that in a down trend, you cannot really call the bottom, so you must stage your entry points, while being ready to jump in if the trend does reverse itself like it just did in AFA..
In AFA case, it clear that over the last few weeks, the downtrend has been stop, therefore momentum player cannot push it down anymore and that a solid base is building, therefore the future does look good technically speaking...
But for me the key point is that on a fundamental basis the future is much better, the majority of the investors with wrong expectations are out.. It will not be very hard for the technical report to prove the market wrong... heck even now the market is only assuming a resource of 237,500 carats... while no where in the Corporation communication can we find any statement from the Corporation that change the potential between the 600,000 ct and 1,8 million carat potential...
Furthermore, the market for diamonds is getting hotter and the AFA story is getting some traction in South Africa.. just take a look at the article on AFA published in a South African publication... (afa web page, page one left side)... Funny that nobody pick up on that on Friday...