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Kibo Mining (LSE:KIBO) is currently at a critical level. Would the price turn upwards and assume a protracted uptrend or would just plummet further? The answer is below.
The ADX period 14 is at the level 30 (with the DM- far above the DM+): this shows a strong bearish pressure. The MACD (default parameters) histogram and signal lines are all below the zero line. All these actions testify to a strongly bearish market, and it is thus suicidal to go long right now, until it is clear that the weak trend is over, although, further downtrend in the market would be punctuated by transitory rallies. There is no way of preventing a weed sprouting up on a large vegetable farm. The optimal period to go short is when there has been a Bearish Confirmation Pattern in the market. Going short with the kind of price action puts the odds of success in our favor, as we wager our allocated fund and put the risk control parameters on the open trades. With a stable trading strategy you would usually know what to do in case of any eventuality in the markets.
This article is ended with the quote below:
“Once a trade is not going the way you want it to, emotions jeopardize your actions because any uncertainty is perceived by our brain as a disturbing emotion that sometimes causes devastating actions to be triggered.” – Norman Weltz
Kibo has a market cap of only £4.5m having fallen from £23m in August. They seem to be getting their act together and yesterday announced they received approval from the Tanzania Government for a Power/Coal project.
They have also completed another Joint Venture with a large Brazilian company. This JV covers a large land area called Haneti and they are searching for large deposits of Nickel.
Kibo paid £21m for coal and Uranium assets in mid 2012. These assets look very significantly undervalued compared to peer comparisons.
Troll bashers have been operating on Kibo related bulletin boards since re-listing in August. Clearly there are/have been short positions taken out. The question is will Kibo shock the market like a number of other small caps have done with a major deal?
My personal bet is upside is more likely than downside from herein.