It is such a hard call Misterbet until we see how good the news is and how much volume it brings in.
We know that on a really good day off the recent bounce from .015, the share price went to .039 the next day for the high.
I would probably let a few go as we approach four cents just to be safe and reduce the ECFL portion of my portfolio from the current 60%. To be honest, that is the only reason I think I would want to let a chunk go, because I give greater bias to fundementals in a stock than the technicals and I think the former may gain in prominence, thus giving the longer termers something to cheer.
If things are looking weak for whatever reason, I might even let some go in the low three's though.
If this stock is just romping up on big volume and the news justifies it (i.e. the revenues are great), it is hard to say exactly how high it would go. We have the chart history showing us where the share price has been and it is therefore anybody's guess.
From the chart, .024 - .025 is a big short term marker for us to get past. Then I am looking at the .032 - .033 area as another marker to shove out of the way. From there .039 will need a big push.
Four cents and six cents are big milestones to push past, but if we already get past the .039 point, we may well get the volume.
It is more than likely that after the merger, the new company is going to want to give the share price a boost and ideally take on the shorts that have battered them.
There are so many possible news pieces that can come, but if the news this week (and I don't just mean Monday if the revenues are absent from the news on Monday - I was told they are coming this week) is stellar and we get good revenues and also the OS, AS and the float count, and it all looks good, what is to stop us carrying out a sensible calculation of the share price based on actual EARNINGS? I also think it is reasonable to expect to hear joint plans for the new company that will indicate more future growth.
I posted a stab in the dark guess a week or so ago that if the OS is 1 billion shares and the revenues are on course for $3.2 million (2006 projected in past PR), that that would give us a $0.064 price per share based on a profit margin of 50% (given in prior PR) and applying a PE ratio of 40 (conservative for high growth company).
My best answer is that I won't know until we start trading Monday after the news. I watch the ticker and charts all day, so I will base my own decisions on that.
I will be pleased if the news is good enough to get us through the $0.039 barrier. I will be very happy if we go through six cents.
Anything above that and you won't see me post for a while, because I will be out in my garden having popped the champagne!
I don't think all this is going to happen in a day anyway, unless the company have prepared the news to take everybody by surprise (it happens !) The first time I phoned the company and asked somebody about the news, they would not be drawn, but they did say I would be very pleased when it comes. DB posted on Friday that Monday's news is "positive".
May need a night cap to sleep well on Sunday night LOL
R.
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