Originally posted by avagadro
I am in for the long haul on this one.
The only real reason why one would hold to a falling stock is the fear of missing out on a big pop to the upside. And the fear is so intense if a stock is known to make a move of 30% or higher over a week. But I think this is when you play with a fast growing business with high stock valuation. A company like AusCann has no production, no growth, in fact, no nothing but a few sheets of papers (licenses/approvals). It has about $40 millions in the bank with a current market cap of about 125m. The chart is telling us that it is not going to run away like a rocket to the upside. The last pop from 46c to 77% was such a speculative one! I don't think this will be repeated. If one is game enough now, there is probably a chance to load up around 35c - 32c and enjoy a pop (deadcat bounce) between 25% - 30% to the upside (assuming it will again get higher than the previous low). This is now enough to save the poor retail investors who came in around 60c.
The charts show that we are near the time for a deadcat bounce. I might want to jump in and play really small just for the fun of it as I don't want to be stuck with this stock again. It's always the most severe in the last 7 days of selling before this kind of stock makes a new bottom. If one comes in a bit too early and a bit too fast, the chance of getting out with a profit is slim. And the fear of missing out on a rally will lock retail investors in for more losses.
Of course, there is a chance that AusCann turns out to be a real company years down the track. I wonder why they still hold on to both the vineyards and the wine companies but never talk about these in their reports. Also the chief winemaker had left their wine company over 10 years ago to join another one. It looks like AusCann can never make a decision to get rid of deadwoods and hire a new CEO. Elaine probably sold her holdings to play golf or have babies. Soon her father would retire and play golf too. I think if the next news coming out were about Mal retiring and we would have final director report showing the transfer of shares to a trust fund (to be dumped and already dumped but won't show up in the future report), and AusCann might be finished.
Hope you are right about keeping this stock for the long haul! I no longer have trust in this company.
