Minbos - MNB - Phosphate!

[COLIN]

Can't find a thread for this, but I bought into Minbos a few weeks ago, based on the technicals, and am pleased with its progress since. Now 55c with a broker assessing a DCF value of $2-81 using a 15% WACC. Could be a "world class phosphate producer" they say. (Mind you, my grandson could be a world class football player some day, too! We shall just have to see how it and he develop!)

[Phaedrus]

Because of the absence of any price history, it is more difficult to use TA on new stocks. Difficult only in the sense that longer-term indicators are unavailable - but this does not mean that TA is of little or no use in such circumstances. This candlestick chart demonstrates that short-term indicators give useful, profitable signals even though long-term indicators are temporarily unavailable. (The red plot is the usual line chart of the Close.)

MNB listed and began rising more or less straight out of the box. This uptrend was confirmed at point (1) when it made a higher high after a higher low.

At point (2) a White Marubozu (bullish) on above average volume, triggered RSI and W%R Buy signals. (Since we have little price history available, all indicators use their default parameters) MNB is now in a clearly defined relatively narrow Trend Channel.

At point (3) another White Marubozu (again on above average volume) broke MNB out of its Trend Channel, triggering an MACD buy signal as well. (I reckon this will be where Colin bought)

The uptrend then accelerated sharply and rocketed away up to point (4) where a Shooting Star was formed. These are a weak reversal pattern.

Sure enough, the very next day the price fell as a Black Marubozu was formed at point (5). Note the low volume though - probably just short-term traders taking their profits.

The overall uptrend never faltered and was reconfirmed by the new higher high formed by the White Marubozu at point (6).

Yesterday's Opening White Marubozu at point (7) took MNB to yet another new high.

Throughout all this drama, the OBV just kept on steadily rising.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/MNB113.gif

Well done Colin!

[COLIN]

Phaedrus: Many thanks for all that most detailed and erudite analysis - and for the endorsement. I don't know whether you ever watch MasterChef UK but I feel a bit like the contestants who glow with pride whenever one of the judges praises their particular concoction!

I did indeed buy close to point (3) - on 21 December, in fact, although the MACD is something that I don't usually consult - ever since you pointed out once that your experience had been that this one frequently sent out unreliable signals. My main indicators are usually the OBV (priority), Slow Stochastic, RSI, Williams%R, and the DMI, all of which I pick up on ft.com. I'm afraid that candlesticks, dojis, marubozus etc are beyond my ken, although I think that, in practice, I probably unwittingly react to some of them as I watch the trading patterns, buy/sell volume movements, etc., very closely.

Thanks again for taking the trouble to post your good work.

[denpal]

This company has an interesting project in Angola and DRC. JORC expected soon too. Worth keeping an eye on as the ag. sector heats up including Australian phosphate plays like MAK and POZ now up sharply.

There is a good research note on MNB available on the web: http://www.minbos.com/_webapp_739769/CPS_Securities_Research_Note

It's just on my watchlist at the moment. Has good share price gain potential, however the 2011 price outlook for phosphate rock is not totally bullish and is currently around $150/t for good grade stuff. North African political troubles could create some supply issues maybe? They would be well placed to export into Brazil. Roads, ports and energy are close by too.

UCL is another phosphate play worth looking into, although with some risk as it is short of capital and is in a JV with MAK on the Namibian off-shore phosphate beds.

[trackers]

I take it the drilling results on 21Jan weren't as good as expected? Big down day on volume (~$500k).

Could be interesting if the "Induced Coupled Plasma (ICP)" assays (whatever they are) turn up anything decent? Results expected mid-Feb

[Phaedrus]

Here is a follow-up on the above chart that some might find interesting or instructive.

MNB was in an uptrend so steep as to be unsustainable. This continued until, at point (3), another big rise was met by heavy selling. Buyers pushed the price up to 65 cents before selling pressure forced it back to 60 cents by the Close. Candles with a long upper shadow like this often mark turning points. Some might look at Point (1) and note that the candle there merely marked transient weakness and so this one too should be ignored. Wrong. Note how this one was accompanied by a Bearish divergence (as marked in magenta). This confirmed the underlying technical weakness of MNB and alert operators would have sold at this point. A lot of people had made a lot of money in this uptrend and some profit taking was therefore inevitable. Next day, more heavy selling drove the price right down to 55 cents (making a downtrend) before new buyers poured in, taking MNB back to its opening price. This created a Doji candlestick and of course these show that the power of buyers and sellers (Bulls and Bears) are exactly equally matched. Underlying this, though, was the fact that sellers wanting to lock-in their large profits would be keener than the buyers and the downtrend continued with a string of black candles.

In the first chart I commented that "Throughout all this drama, the OBV just kept on steadily rising." Well, as you can see, by point (4) that was no longer true and the OBV was now falling. Another Sell signal. This was followed by a trendline-break Sell signal and an MACD Sell signal.

Now, look at the candle at point (6). Note the long lower shadow. Heavy (albeit belated!) selling pressure drove the price right down to 38 cents before buyers piled in taking it to 43 cents by the Close. This is Bullish, but it is not good practice to act on the basis of a single candle. The following day triggered Williams'%R and RSI Buy signals. Buyers and sellers had found some sort of equilibrium by now as the price tracked sideways in a series of Dojis from points (7) to (8). Between these 2 points, OBV and price trendlines were broken, giving 2 more Buy signals. By now, all featured indicators had triggered Buy signals with the exception of the MACD - an indicator that I have never thought much of anyhow!

So, it's all go then? Not quite. Technically, MNB is still in a downtrend - it would take a Close of above 47 cents to break this and confirm a new uptrend. Only then would all the ducks be in a row.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/MNB27.gif

[COLIN]

[QUOTE=Phaedrus;335904]So, it's all go then? Not quite. Technically, MNB is still in a downtrend - it would take a Close of above 47 cents to break this and confirm a new uptrend. Only then would all the ducks be in a row.

QUOTE]

Well, some bright spark has tried to force all the ducks into a row, by spending $175 to buy 350 at 50c. However, it appears that he/she hasn't quite succeeded, as the next trade slipped to 47.

I have to confess that I have continued to hold throughout the downturn - we all have to be prepared to bend the rules a little sometimes! In this case I consoled myself with the strength of the phosphate story, and the fact that the sp was still hovering around the MA30.

[gazprom1]

[QUOTE=Phaedrus;335904]So, it's all go then? Not quite. Technically, MNB is still in a downtrend - it would take a Close of above 47 cents to break this and confirm a new uptrend. Only then would all the ducks be in a row.

QUOTE]

Well, some bright spark has tried to force all the ducks into a row, by spending $175 to buy 350 at 50c. However, it appears that he/she hasn't quite succeeded, as the next trade slipped to 47.

I have to confess that I have continued to hold throughout the downturn - we all have to be prepared to bend the rules a little sometimes! In this case I consoled myself with the strength of the phosphate story, and the fact that the sp was still hovering around the MA30.

Hi Colin,

If I had to confess everytime I hold mine through troughs, ST would be full of my posts. I am sure that the phosphate story will pull it through and you will do well. I held MAK through to 20 cents and it is trading at 60 cents today a few short months later.

Good luck!!

Gazprom

[COLIN]

[QUOTE=COLIN;335918]

Hi Colin,

If I had to confess everytime I hold mine through troughs, ST would be full of my posts. I am sure that the phosphate story will pull it through and you will do well. I held MAK through to 20 cents and it is trading at 60 cents today a few short months later.

Good luck!!

Gazprom

Thanks for the encouragement, Gaz. And you'll be pleased to see NWE putting in a creditable performance today (I also hold).

[COLIN]

... it would take a Close of above 47 cents to break this and confirm a new uptrend. Only then would all the ducks be in a row.



Did we all listen?!

Now 55c.