Posted by BLee > 2 months ago | Report Abuse

What dictates a Share Price? Everyday we hear of Share Punters shouting Share Prices Limit Up (LU) or Limit Down (LD) when Good or Bad news is announced… Can Fundamental or Technical behind a Share can change overnight? Definitely NOT for Fundamental; as Financial Data is built up over a very long period. Then the reason could be Technical Data. What constitutes LU or LD? The baseline is 30% price fluctuation at RM1; RM0.30 below a Ringgit or 30% changes above a Ringgit. Can a Share Price at RM0.30 go LD? Definitely NOT as the minimum price of a share is RM0.005… As for LU, the sky's the Limit. Let's start with the Good News for LU. Is announcing Memorandum Of Understanding (MOU) or a Letter Of Award (LOA) of a few Billion projects over more than a decade is Good News for LU? Is selling assets worth a few Hundred Million NOT knowing ‘just a gain of a few Million Missing a future gain of a few Hundred Million’? One off Gain vs Constant Gain is another factor to look out for a reason for LU.. On the other hand, no reason for LD for one off Bad News if the Fundamental still good. Bear in Mind, Cut-Loss is easy (including Margin Call) as buying up is a bit difficult as new funds are needed to ‘chase-up’ a Share…the herd mentality applied for both ways. My conclusion, what goes down will come back up if FA/TA is still intact and what goes up too high will correct nearer to the Fundamental value. There are many other reasons for LU and LD, welcome to share…Happy Trading and TradeAtYourOwnRisk. Hints: Although no LU or LD for 3 counters as examples, one recently awarded AI projects for a very long period. Will AI be the in-thing for such a long period? The next selling land to par down debts; the revenue most likely will reduce due to lost production. The third is answerable to the investigation that happened years back…