I disagree strongly, in the intermediate and longer term. An ERHE investment has been strongly de-risked by the dramatically positive update we just received, and it is almost inevitable that we will see significant share appreciation. Add to that the several other promising updates.
The JDZ is now a short-term volatility trigger, almost like a pending earnings report. Generally I like to hedge in advance of those. However, with a 9 cent share price, ERHE is already 'hedged' to a maximum risk of 9 cents. Similar to a synthetic call option, but with no expiration date or time decay. So the only 'option' available would be to sell, which seems ridiculous for a intermediate or long-term core position with such a huge upside potential. Someone with a short term time frame would have a different decision.
I don't like to be subject to overconfidence, so I'll spend time going over my notes from the meeting and overall analysis to find fault in my intermediate and longer term projection.
In the short term, it is certainly possible some shares will sell off at a lower price if the JDZ looks to be delayed. This depends on what Total finds and does, and how Sinopec reacts, and how some shareholders react. We know this. There are 3 possible actions to be taken by Sinopec, as we have been clearly advised. Investor reaction to any one of those is difficult to predict, some believe all are already priced in, and we can only go sideways or up. Others believe one of the results could spur some selling. Clearly at least one of them could spur some buying. I don't want to guess at which one will be acted on or what the result would be. Our guidance is they are all possible.
This answer will provide a chance for those who have lost patience to take their money off the table and move on, at either a lower or higher price. And if lower, a chance for those of us like myself who are very positive on the intermediate and longer term prospects of ERHC to add to our positions and lower our cost basis.
If higher, traders, and those who need some confirmation, will likely pile on and we'll see a nice rally. (The 200 day MA is now right at resistance at 10 cents!) If lower, those of us buying will snap-up more shares and gloat over our increased share count and lower cost basis. (You pays your money and you takes your chance)
All indications point to any sell-off being a short term event easily overwhelmed by pending positive developments. That is my opinion based upon the increasing number of potentially positive events balanced against the reduced negative.
I'm not overly focused on price movements that don't hit either my buy target or my sell target. I don't suffer every penny down or celebrate every penny up if it is not an action signal for me.
I think rogerdawson made one of the most sensible posts of any long term ERHE investor with a high target that I have ever read on this forum. I'd suggest others read and ponder it, as it would take more than one reading to fully understand his message.
AI
