TOC closed on Friday at $1.03 on 51,800 shares.I thought TOC traded very well for the week, and why do I think so, my general rule of thumb is if the closing price on Friday is higher than the previous Friday’s close, the trend of a company is heading in the right direction (this is generally bullish). There is no reason to believe that the drop in price had anything to do with the technical fundamentals of TOC, perhaps this was due to a thinly traded equity, combined with timing going forward.
TOC traded about 186,000 from Monday to Thursday reaching and closing strongly bid at $1.13 on Thursday. Gold was up strongly on Friday pushing back over $1,800, but something changed in the pattern of how TOC was traded. However, it was good to see TOC closing at $1.03 on only 51,000 shares of selling, not an unusually high volume.
I have a slightly different theory why this happened. For those watching the orders setup before the open, a couple of big sell orders appeared at $1.15, then just after the open a 10,000 share sell order appeared at $1.13, this instantly created selling. This also caused others bidding below to remove their bids (I saw a few vanish, perhaps they are thinking they could pick up shares at lower prices). The question is where these short orders designed to scare people into selling, thus taking advantage of a thinly stock and less people watching on a Friday. I noticed the number of short shares posted on October 15th increased to 47,684 (up from 24,000, and perhaps there is even more since then). Again, nothing fundamentally has changed that we know of but there have always been short sellers around TOC, back in June the short position was as high as 384,000 shares (this is a lot considering the low number of shares outstanding).
Why were the shorts potentially able to take advantage of few buyers to push the price down? If you look at the press release from August 28 TOC said they would be staring the trench program in October, then followed by a drilling program. Well, it is now October 23, and unless there is a press release soon the shorts maybe hedging that something is wrong with timing so they will try to push the price down with larger and larger bids.
….”….. Tocvan plans to initiate its next phase of exploration with the start of a trenching program in October of this year. Trenches will be used to better define surface mineralization and provide material for initial bulk sampling. Immediately following trenching a phase 3 drill program of a similar scope to phase 2 will continue the advancement of the project. The project is permitted to complete the planned trench and drill programs …..”…..
Looking at the history of TOC, they didn’t begin drilling Phase I until December 1st last year. There are likely many moving parts and it will take time to pull them all together. Perhaps by then the shorts will be in deeper and deeper and work to our advantage by forcing them to buy back in at higher prices. I am certainly looking forward to the months and year ahead.