Originally posted by Capital Raising
It's hard to look at a chart moving up strongly and imagine how it could start selling. But imagine the position of not yourself but all the participants making up the market.
A lot of people bought into the capital raising and took a huge bath and are now break even to slightly in front they will be tempted to get out unscathed.
People who followed the charts were out at 1.70 - 1.75 and back in at 120 - 1.25 now there is a strong temptation to be back out at 1.95 believe me. Anyone who held through that sure no motivation to take the very small profit. But there is a very large profit incentive for me at the moment.
Always enjoy your input CR, but disagree with some of your comments on this occassion.
The capital raising went to a lot of big funds, at the time of NEA's admission to the ASX 300, not many of them can just sell now, as they are index funds. It was also a serious raise ($70m) to some serious players who would be looking at a 5 year time frame with NEA. Given Nearmap has outperformed the market significantly since the raise, it is hard to agree with your point that they took a bath (Nearmap has been a day spa compared to the rest of the market!!) on this one and would be looking to exit.
I agree there is a strong temptation to sell given the recent rise, that is human nature, but I disagree that this is based on the Charts, everything looks pretty good on the charts at the moment and while short term there will be some overbrought indicators, medium terms trends are all very positive.
Now $2 will always be a point of resistance, no doubt about that, traders use these junctions in a share's price to their advantage, hence why when you look at the market depth almost 40% of the sell depth sits at $2.
I think some consolidation today, tomorrow and next week between $1.95 and $2 would be ideal for Nearmap longer term. We sat around 90 cents for a while and a similar consolidation would be perfect to shoot this up to $2.50 in February around the half year results. Of course a pull back and consolidation in the $1.70-1.80 range is also possible and might happen if world markets get uneasy again.
