GBN.V Monthly P&F

One of the ill-fated assumptions I had made about the advance of the GBN.V share price once it had exceed its previous price high of 68¢ in 2007, was that it would continue on upwards.

The price reached 75¢, the noted target value of the barely visible inverted head and shoulders formation. I only wish I had been able to generate a P&F chart back then. In that time, Resolute sold some 20 million shares during the price rise. The same hedge fund player dumped the remainder of their shares, possibly into the December 2012 low.

But the cause of the extreme rise and decline in the shares is the hedged equity swap position in GBN.V shares, which holds 65% of the float short over time. Hedge fund players that were not betting in favour of the company were doubling down on the sell-side bets, especially since the no-down-tick rule was abolished in 2011.

The monthly P&F cleans out all of the noise since the nominal low in 2001. The easy speculation is that we might see a repeat of the same type of action in the stock in 2002, only on a larger percentage scale.

The one big thing missing about this low is a major capitulation as you might have had in the GDXJ recently and a long, agonizing trade around the bearish price objective.

stockcharts.com

-F6