Kentor Gold: Trading Update

Some of you may be wondering if I sold my Kentor Gold trading stock into the Jervois Announcement as I indicated that I may do. The answer is no, I continue to hold the trading parcel for a number of reasons which I wish to detail below:

1.       Firstly the announcement failed to generate enough buying interest to sustain the share price above 14 cents. I am not trying to be greedy but I believe if I am going to take profits off the table (and try and buy back in) before the Andash announcement is out then I need to be compensated for the risk of holding no stock when this occurs. An approx. 25-30% return in this instance (if I was to sell at 14 cents) is sufficient in my opinion.

2.       On the day of the announcement I kept a close eye on the market depth and course of sales anything at 12.5 or 13 cents was fairly well supported. As a result even if I managed to sell some at 13.5c (only one trade went through at 14c) then the likelihood of buying back in much lower would be fairly low. Buying 0.005 cents below my sale price is only a 4% move and not really worth the risk/effort. Also due to the volume of buyers I may never get my order filled at this level (12.5c) in time.

3.       I also reviewed the chart which confirms the on market buying at 12.5 and 13cents is in line with a key area of support. The chart is also in an uptrend and taking money off the table at this level would be giving up too much of the potential gain in my opinion.

4.       I am confident that the outcome for Andash will be positive. It may require me to hold the stock for a little longer than planned but so far everything appears to be heading in the right direction.

I currently have an order to sell the stock at 14 cents (as per point 1). I would hope that this is only a brief run up before a pull back to 13 cents or lower so that I can buy back in again. I will keep a close eye on this and if I think the buying interest is strong over the next few days I will lift the order to 14.5 or 15 cents.

Taking this approach does however run the risk of holding no “trading stock” when Andash is released. This is a risk that I will have to take, otherwise the “trading” becomes more like “investing” as you continue to wait for a “big announcement” in whatever stock I am invested in at the time.

Alternatively if the Andash announcement is released I will pull my order completely and monitor the intra-day action before closing out my position at a level which will hopefully be higher than 14 cents.