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I am often asked is it too late to sell in this sharemarket demise. There is never a single sentence answer to such a question. It may not be too late for some stocks but for other stocks it may be time to start thinking of buying.
Each week in SharesBulletin (http://www.sharesbulletin.com/) we review a stock submitted by a subscriber. I am going to share one such review we did some weeks ago:
‘George asks how low can BNB go?
George it is not easy to be anywhere near precise with stocks like this as there are so many factors driving its movement. Not the least of them is ‘shorters’ who can mercilessly sell the hell out of a stock and thus price movement is tough to pick using technicals. I am not sure what is happening with this stock but it still looks like one sicks lil puppy.
But let’s look at the chart:
click to enlarge
The stock was up around the $34 level last year and everyone who had bought in had this feeling like being able to walk on water but excuse my mixed metaphors – but they have now had to drink muddy water.
The above chart shows a possible recovery over the coming year back up to $15 but at this point many will desert the stock.
In fact before that many will sneakily sell own on the quite and so what we are likely see is a rising price on falling volume. The above projection is for a year or so out but the chart below is for the short term:
click to enlarge
This chart suggests a low down to around $3-4 if the first or second wave is met. The first chart suggests a low of around $1.50.
Take your pick but either way it is low compared with $34.
Never let greed get to you as there is ultimately a price.’
We also reviewed BNB back in April with a similar outlook.
After many years of ‘hard knock’ experience I live by the mantra of never being a missionary for a stock. Thus do not buy it whilst it is falling and cut losses, cut losses and cut losses.
Enjoy the ride
Tom Scollon
Chief Analyst
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