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I was doing the math in my head on the way to work this morning. If Triway only achieves half of the build out per the license agreement that's still bigger than two mega farms - someone correct me if that's not right. And since SIAF holds the license, there's no reason they wouldn't go to India or Africa or wherever to do another JV and remove some of the risk from operating exclusively in China.
I really pray this pre-ipo comes together.
Well the PR covered a stage gate event. And KCSA said something to the effect that new investment will follow milestone achievements. Judging by the size of some of these blocks, I think that's what we're seeing. At least some of it.
And over 75,000 shares traded in the last 5 minutes.
Ok. I think the horse is officially dead. We can walk away from it now.
Since we both think there are good things in store for the share price later this year lets come back to these posts and look at how things played out. I strongly suspect you'll get your panic buying. But I strongly suspect we'll see a silent accumulation phase that will be telegraphed in the TA. I have 1/3 of the position that I would like to have. The rest of the powder will be kept dry until I'm confident that we aren't in a downtrend. I won't get the bottom, but I will get a very, very good price.
Well I think we can agree to disagree then. Yes, it is theoretically possible to wake up one day and see SIAF 70% higher. Anything is possible and even the best TA in the world isn't going to give you an unobstructed view of the future.
BUT.... It typically doesn't work out that way. My approach to TA protects from downside risk because that is my goal. And if you look at what's happened the last 18 months, it's hard to argue that's a bad strategy because even if you did wake up and see the price 70% higher, that's still lower than most people here bought in when they thought they were getting the bottom. Maybe not yourself, ha ha because you're a very excellent trader. But most of the people here have entered on a hunch that turned out to be wrong instead of watching the trend - and it cost them. I'm saying the trend matters.
Typically there is an accumulation phase before major news hits. Not always. But usually. There's more time than people think. If you look back at the big moves that SIAF has put in, in both cases the rate of decline stopped before the news. The short term EMAs moved over the long term EMAs - i.e., someone was accumulating. So the clues were there. I suspect we'll see the same in the future. But that's not what the TA says. That's my own speculation.
I know someone who is now retired who didn't follow traditional TA. He used it to supplement his intuition and his ability to read company financials. He hit the jackpot several times and is now retired. I think his style was similar to yours. But most of the people I've come to respect as accomplished investors make their money by watching price and protecting their downside. The different approaches simply aren't right or wrong. They're different paths to playing the percentages.
Hi morning_luke,
I have technical and non-technical thoughts on support but it’s important to keep them separate. Technical guidance is typically very limited and more often than not, people read into things that simply aren’t there. But it will save your ass if you listen to the simple things that it does say. In terms of SIAF, my technical reading is pretty straight forward:
1. The price is channeling down and it’s a strong channel that’s been validated multiple times.
2. There is very long term horizontal support in the area of the current price. It’s not so much a line as it is a zone of support. And FWIW, most S/R lines are zones. Some are wide and some are almost lines – but S/R typically should not be treated as a precise line.
3. The top end of the channel is most well defined of all the major S/R lines, having been tested the most times in long, intermediate and near-term time frames and with the greatest amount of precision. The top end of the channel should be expected to govern all other S/R lines. More than the horizontal support.
That’s it. There are no predictions about the future. By my reading you simply wait until that channel is broken and then assess whether the relative strength of the price action warrants going long. If you wait, by definition you won’t catch the bottom but you also won’t be trapped in the channel. When you actually decide to go long is a whole different subject that gets into momentum, price structure (wave structure.) and intra day buying patterns. And I can elaborate on that sometime later if/when things get interesting.
Now my own personal thoughts on where support actually is, irrespective of my technical view is that we have a window to announce the pre-IPO and that window doesn’t extend very far. Maybe to the middle or end of March. I don’t know exactly how long. The pool of investors that participate in the OTC has been exhausted. There is no more new money coming until certain risk factors have been addressed. And I don’t care what KCSA said or what people here think they said. No new investors are going to show up until certain risk factors have been addressed. I would think the obvious first risk factor is access to funding and the pre-IPO makes all of that go. Then they have their credit line and a validation of the company’s asset value all of which will keep their construction schedule on track. Until then, it ain’t happening.
So is this the bottom? Don’t know. I prefer not to think that way. If when price reverses the trend it’s in, I’ll assess where to buy more. Do I think the management team will pull it off? Yes I do if only because they’re in too deep to change plans again. But whether or not it will be before the end of March, we’ll just have to wait and see.
So a few things about drawing the trendiness. First, when you're drawing ascending or declining support/resistance, you're tracking the RATE of support or resistance. Therefore you need to use a log chart since a log chart will show change in percentages. Drawing ascending or declining trendlines on an absolute price chart means that you'll have to constantly be redrawing the lines to make up for the gap between price and %.
Also, the failed gap (coinciding with Merker listing) was only intra day and the opening price was determined by MMs. It's not valid to set multi-year trendlines based on an event that was only determined by a few trades. The close of that day was actually just below the declining resistance I have shown.
Some other notes:
- Trend lines really need three touches to be considered valid. The last touch essentially validates the trend line.
- Trend lines are much more reliable when they're spread out over the length of the trend. If you have a whole bunch of touches at the beginning of a trend and none towards the end then it's probably not a valid line.
- Trend lines drawn from closing price are typically more accurate than intraday.
The one thing that stands out to me with the SIAF chart is how constant the top end rate of decline is. Over the last 18 months it still seems perfectly valid which tells me that the whole decline is being governed more by traders psychology rather than any change in company fundamentals. I would also say that everyone who's tried to catch the bottom of this move down without waiting for the price to move over that declining resistance has either had to sell at a loss or trade out for a small profit. If you're going to establish a long term position, it will be wayyy better to wait until that declining resistance line gets taken out.
That's the right idea - the price is channelling and there's a long term support line (which has actually been breached). But your trend lines and horizontal support aren't drawn correctly. I'll post something shows what I consider to be the governing long-term support and resistance.
I watched the train wreck yesterday. NITE and CDEL had taken turns boxing the spread. When the bid cracked 3.55 (or thereabouts), more MMs started piled on. Mostly small trades. A few large blocks. But there wasn't one single MM driving it down. IMO, it shows how insecure and exhausted retail investors are right now.
Keep in mind that the final value is likely a negotiated process. Each side typically has their own appraiser and the final assessed value is almost always somewhere between the two. As with all timelines from the company, I think this one needs to be padded with more detail.
$3.79 awfully sticky here. Four consecutive closes at the same level. My guess is that we're going to be in this zone for a while.
MMs are not required to honor their offer on the OTC. It's the only exchange I know of that operates that way and one of my biggest peeves.
It will be interesting to see if the stock gets a floor put in once the asset appraisal is finalized. I think it will but am not placing bets (yet). SIAF would be available at a discount to the pre-ipo and I think this is the first milestone that KCSA dude was talking about for his investors. But first things first: let's see the rate of price depreciation slow down. Let's see the short term MA's move above the long term MA's. That's a good first step.
There's no bull flag there. Not in any traditional sense. We've been in a downtrend for almost 18 months. A bull flag is a continuation pattern within an uptrend.
I'll say it again, in the conference call the KSCA dude said that he would expect to see larger investors move into the stock as milestones are hit. He said he would start reaching out to those investors now. But those are two different things.
Clearly there are risk factors that they want to see addressed so I'm not expecting a swell of new money until a spinoff date comes into focus.
He said that we will see institutional investment come in at milestone events. He did not say which ones but the pre-IPO for either SJAP or the megafarm are kind of obvious.
I think that makes today the single highest volume day in SIAF's history. Nice factoid.
There is a large operation in Texas. Private company, pretty large but not at the scale of the mega farm and lower margins. Anyway, they tried to make this leap in early 2016. The hatchery had a pathogen which went undetected until they were in second phase of grow out. They had to dispose of everything and start over. But they already got cut off from the supplier. It was a huge loss in both time and money but they eventually recovered. Anyway, it would be disastrous if that happened to SIAF. I'm just guessing but that could be one factor slowing the loans down right now.
I don't know how they'e integrating the breeding program with the grow out but there is a balancing act here. If the company doesn't already have the two integrated then new investors are coming in at a very risky time. If the supplier gets a whiff of what they're up to then they'll cut SIAF off - doesn't matter whether we're talking demo farms or mega farm. The whole operation is cut off and they'll be reliant on the remaining revenue streams until they have a stable broodstock.
If I were going to take a major stake in the mega farm, I would absolutely require that this part be taken care of.
Interesting because I wouldn't expect the loans to close until the broodstock program is up, running and proven successful. Weaning the company off their supplier while maintaining business continuity is a huge operational risk. Can you image the litigation that would immediately ensue if the first batch of prawns failed? It wouldn't be operationally fatal but it would be close.
Did you interpret this to mean that they are starting up their broodstock program? I never fully understood this part and I think most people glossed over it.
It's very much a valid question but I think the answer is that they have ambitions to turn this into a global operation. They want a management team and advisors that have the influence to secure additional funding and facilitate agreements for growth beyond China and an investor base that will listen to them. In the short term the NEEQ is maybe more attractive but in the long term I think this is a better strategic move even though it's a tougher road. I could be wrong, though. That's how I was reading things.
For what it's worth Empty, I'm a buyer right here. I was bearish not too long ago. But by my read, a bottom is being put in - we've had three probes below 5 and the last was a higher low. Oscillators are confirming some signs of life. I would say the odds of moving up now outweigh the odds of moving back down. Accumulation is starting to trickle in and if we get a crossover of the 13 and 50 day EMAs on decent volume then it's game on.
I looked into this once. As I recall the problem was not only the breeding but also the mortality rate of the spawn (almost all die in aquaculture). And then almost all the ones that mature in captivity turn out to be males. My impression is that it would take years of research to bring this to market as eels have a complex life cycle. Maybe not a rock SIAF wants to carry right now.
fwiw: this is his former incarnation:
http://investorshub.advfn.com/boards/profilea.aspx?user=374965
Been a while since he's posted but now that he's back it's pretty much the same script. The difference is that after 3 years his due diligence has become "new" again and he has a slightly less annoying handle.
I'd agree with that. This has been going on for weeks. At first NITE didn't want to sell below 8.00 but once the damn broke he's selling directly into weakness.
NITE has been parked on the ask for a couple weeks now. The OTC doesn't look like it's going anywhere until he's done.
It means 'say it again in a way that's less cryptic'. The contract as explained is good for the duration of construction of prawn farm 4.
What does that mean?
It's a good time to ramp up a large project. China has a lot of spare capacity and materials costs are much lower than they were just a few years ago. This deal demonstrates that the government is going to give money away to keep people turning shovels. It's a win for the company.
The one fly in the ointment from my perspective is that payment is due six months after construction is complete. I would like it much more if it said that payment is due 6 months after the project is successfully commissioned. Why? Let's say the construction is complete but upon commissioning there's an engineering problem. The water is too warm because the engineer undersized the ground loop for the heat exchange. That's not the contractor's fault, right? They need to get paid, pronto. So has the company budgeted the necessary contingencies when things don't go right? Because some things will go wrong. that's just how construction goes. This is a contractual issue that I hope is addressed because the chances that something will delay commissioning of most of these facilities is a near certainty. It can be addressed, but I'm just hoping that they anticipate it correctly.
That's the plan, Joe. The management for the spinoff is supposed to be a European team with a prior track record in aquaculture. I know you don't believe any of that - just sayin...
That's just not true. The light at the end of the tunnel has been a belief that the company could migrate towards a risk profile that attracts institutional investment. Not whether they made $3.60 per share or $6.00 per share. It's never been valued according to earnings or growth. By any standard metric it's ridiculously discounted regardless. Fast growing companies with high capital investment almost never have predictable growth and most institutional investment knows this.
If you're a Western investor, you aren't looking at the whether they'll be able to sell more sleepy cod next quarter and get their earnings back on track. You're looking at the other 95% of the Swedbank report. You're looking at the MF. You're asking yourself whether:
(1) it makes sense to buy a Chinese conglomerate with poor financial reporting on a crappy, backwater exchange for a significant discount or
(2) whether you should buy into a streamlined Nordic managed aquaculture company with aquaculture experience for some premium.
But there is zero information here. Seriously, if we set aside all the existing complexities of this company and just focused on prawns and nothing else - and you asked me whether it would be better to buy before the spin or after, I couldn't even begin to tell you.
Its more an issue of transparency - the market is responding to uncertainty. There's been some assurance that the spin is progressing and that the master strategy of spinning off the value components is being executed. But zero details on the mechanics. What role will the new management team play in securing a MF loan? Who is the new management team? Will it be a sponsored spin off and if so, how much of the company will remain in the shareholders control? How much voting power will the parent company have? Do they plan to couple the spinoff with an IPO? Does the parent company expect to get a cash benefit from the transaction? How much assets will the spin start out with and how will that affect the ability to borrow? How much does the existing share price of the company even matter? So many questions... We all have our opinions but there aren't many facts.
I think at this early stage the quality of their customers is going to be more important than the quantity. But going forward it will be good to get an idea of what their strategy is for managing turnover.
Sure, that's totally necessary. A stock grows one investor at a time regardless of where it trades. But it's different from what I'm talking about. What I'm saying is that these exchanges are so thin that they don't facilitate price discovery - so any major move becomes a flash in the pan. The market maker system breaks down when an MM has to constantly chase down limit orders to make a market. And an auction system basically just freezes up. And both of those things affect investor perception of risk.
When you have that robust ecosystem that I mentioned before - more investors but more traders too. More institutions. More short term money, more long term, more everything... the market starts to behave the way its supposed to and the price will start to reflect long term changes in the companies fundamentals and not just this short term noise.
I'm not saying this stock can't go back to $17, or $24 or even $36. But if you want to go to $100, which will only happen with a sustained trend over multiple years, the company needs to get its financing in order and get all or parts of it's operation onto a major exchange.
SIAF will also need a senior listing for the whole company or the spin. To get from "Point A" to "Point B" we will need a sustainable trend. I'm talking about a large trend that matches the trajectory of the company over several years. Within that trend are pullbacks and periods of price consolidation, of course. But the Merkur and OTC don't have the right ecosystem of investors to support a multi-year trend that can match the growth rate of the company. Not by themselves, at least.
I see the financing and the spin to Oslo as part and parcel to the same thing. Ideally, they are orchestrated together.
Some species like sleepy cod are freshwater. The prawns are saltwater. The ras system can switch back and forth between fresh/salt water. Not sure how desalinization is handled but someone who's visited might be able to say.