Serial underperformer Borat Longyear (BLY) has seen a 15% surge today on news the falling knife that is its rig business is slowing. Mining services peer Ausdrill (ASL) is not far behind, adding 9% likely on the news from BLY, having lost 75% this year on missing of deadlines, suffering from cost blow outs and pipeline issues.
Forge Group (FGE) is also having a positive day, having lost 92% four weeks ago on massive write downs, guidance changes and a capital raising. The stock has been on the up over the past week adding 25% last Thursday and today’s 6% move shows momentum and technical traders are adding weight to FGE’s change of fate.
QRXPharma has added 12% on no news, with volumes well ahead of its 30-day moving average having lost just shy of 50% year-to-date and is one to watch over the coming trading day.
Echo Entertainment (EGP) has also seen a positive bounce adding 5% on news that The Star casino in Sydney will get a new MD after Frederic Luvisutto is set to leave his post after two of the most tumultuous years.
I am wary of these moves as they look like short covering and vector trading. There are certainly trades to be made here, however I would want to see if this pop is based on momentum or actual structure changes.
The moves in BLY and ASL I think will be short; any news the market is still in decline and profit will be locked in, the same can be said for FGE. If the trade reverses in any way I would be looking to short the stocks on the way back down.