$Elixir Energy Ltd(EXR.AU)$ I have never shared this trade... if you look at the chart below, it was terrible from the moment I bought. Had bought a starting position at 17 cents and the share price quickly collapsed.
The collapse in share price was due to a drilling result announcement, as I recalled. However, I was not deterred or disappointed. The drilling result was actually neutral however market was expecting something else. You can trace that to the rally prior to my initial investment.
The company in question is drilling for gas in Queensland Australia. The region that the exploration is taking place is a hotbed area, with the likes of $SHELL PLC(SHEL.UK)$ as its neighbour. Expectations are no doubt high then. Perhaps too high...
As seen in the chart, I have added subsequent positions to my original investment, bringing down my initial investment cost. Call what you may but averaging down was never my considered. I had followed up with my initial investment by attending the management's discussions on the initial announcement and convinced that the company is on track. Subsequent activities helped to reinforce my initial investment thesis and formed the basis for further investments.
Lately, oil and gas prices started to recover. Furthermore, EXR followed up with more promising drilling results that validates my previous assessment. On top of that, one of its more prominent neighbour (not Shell) decided to invest in it! That provides the market with more confidence that EXR would deliver. It is now a matter of 'when' rather than 'if'!
Looking at the chart below, EXR is at its early leg on this run-up. It has just formed a cup and handle. The target price is around 13.5 cents. There's a potentially 2nd cup and handle formation down the road. Yup, at my initial investment point of 17 cents. We will talk about it when we get there...
Oil and gas is here to stay, like it or not. Renewal energy is definitely here but it will take time... if you look at coal, just how long does it take to remove or replace it? Gas, a cleaner energy, I would foresee a much longer runway... I am in this for the long haul even I support the green energy drive...
The learning here is check your conviction and support it if it is still valid... that's the basis of this trade and I am sharing it here...
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- DaveLewis·01-19 12:57Solid conviction mate! Averaging down paid off big time. [看涨]LikeReport