You going to underwrite me? I'll phone up ANZ next week and see how they feel about lending $105M to a Canadian woodland creature who works in a dungeon archiving stuff for a living.
Yup, can see that one going down well! :)
Printable View
Xro is in a downtrend, a huge downtrend, and I would not be buying unless i saw data that confirmed they were on track. The announcement today, spin aside, gives me no confidence looking forward. As for insto's buying, well generally insto's know no better than the general punter if empirical evidence is anything to go by. The Dow/S&P were up by 2 odd percent and still no movement here... One wonders.
Would anyone else who watches bubbles care to comment on where the trend started? Some would the Thiel buy @ $18.70, others @ $15, some when Xero HQ went wild with $10 being broken and even more @ $5.00!
My theory is that all bubbles retrace, to a slightly greater or lessor degree, to their pre-bubble price point. Problem with Xero is determining that price point!
Don't believe me? Look up a few recent bubble stocks like MNW.AX or TON.AX. Or just look up the entite Dotcom Bubble!
TIA :)
I'd say March 2013 at around $8
That's the impression I get from a long term chart (log scale)
Extension of underlying trend from share price now about $15 or there abouts
In the short-term, yes. If Xero can pull it off and get massive numbers then long-term, no.
A good example is Amazon and Pets.com. During 1999-2000 both assumed massive valuations and bot fell drastically. However, Amazon continued to execute and now commands a share price MULTIPLE times of the Dotcom highs. Pets.com never executed and imploded, never to be ssen again.
That is what I think of short-term vs terminal bubbles :)
When and if that happens then the SP action will change and eventually start an uptrend--That is where the smart money will enter-you lose a bit of the ''gamblers gains'' in the initial stages but buy into a far safer share.
With all due respect to their ''proven track record'' in general--their track record for XRO is not to flash.
Ask yourself ,if you had sold when the downtrend started,could you afford to have to buy in at even another $5 now if things turn for the better?
I realize its not easy to lock in losses,but it all just a frame of mind--If you can keep those losses manageable and buy in latter at a lower SP often times you are better off--Its not easy though-I watched it happen with my PPP shares (but learned) and managed to keep that from happening by getting out and back in a few times with PEB--It wasnt intentional day trading like some--it was more staying alive.
The longer term Log closing price chart may offer some insights, though it cannot predict with any certainty. This may be where some of the suggested numbers come from that have been put forward on this thread. Firstly just draw in the typical support lines, then draw a Fib retrace and pull down the starting point until some sort of alignment with the major supports occur.
Doing that finds that one has to go back to Aug 29 2012 at $4.32 close to find any synchronicity. Uncanny as it may be, the Fibonacci golden ratio 61.8% aligns near perfectly with the big breakout Oct 13 2013 and the pause/rebound where the big money bought in mid Aug 2014 (that's more likely the bubble part - or as I like to think of it as the USA story - though now completely sold off). It also aligns near perfectly with a simple horizontal/rising support line.
When the golden ratio of 61.8% breaks down, typically there's not much mainstream support for Fibonacci ratios, but you will find some who like the 72% (closing price) - especially forex looking for a trend reversal, and even 78.6% ... so let's look at them briefly. We could talk about Elliotwaves but that's another story.
Uncannily again, the price now at $15ish is near perfect around the 72% retrace, and aligns near perfectly with another simple horizontal support line. You'd think this would be solid support, but the price is in a terrible prolonged downtrend and money flow is anemic. Some might even get out the magnifying glass and figure that the current closing price is already down from the Oct 21 and Oct 30 closing prices (gulp).
So I'd say the Fibs have worked rather well so far, assuming the $4.32 starting point (they also found the 38.2% pretty well). Should we be surprised then that the 78.6% retrace also coincides with a horizontal support around $13? Possibly not.
Using Fibonacci below 78.6% though may be clutching at straws, so I'd suggest just drawing in the obvious horizontal supports.
Summing all that up:
A closing price breakdown may have already occurred around $15.63 (72% retrace), though that is to be confirmed. The obvious support lines below here are around $10.90, $6.85 and at $4.32 being the 100% retrace. The downside capital risks from here, to those supports are $15.63 to $10.90 = 30%, then $10.90 to $6.85 = 37%, and $6.85 to $4.32 = 37%.
Disc: still not in, but obviously watching closely for re-entry.
Nice post Baa. That 21/30 day MA is pretty telling of price trend eh?