After briefly hitting close to £3 again this morning, Xcite Energy (XEL)
has finally rallied from its lows to rise as much as 19p to 323p (6%).
The shorters have been out in force over the last few days. They hunt in
packs using the bulletin boards to feed false rumours into the market. Supposed expert posters were questioning the work that Schlumberger had done on the flow test in December and whether the CPR would be delayed again because it hadn’t been done properly and the classic yesterday that
the oil actually wouldn’t flow because it was too viscous at ambient North
Sea temperatures. In other words, the drilling experts, Schlumberger had
been complete monkeys and made a hash of it.
Then there was the conspiracy theories that the board were keeping market
sensitive information to themselves and that the reserves upgrade would be
below expectations and that they had change supplier (to TRACS) to massage
the figures. Oh, I almost forgot the rumour that they were planning a
massively discounted rights issue at £2.50. All complete XXXX of course!
So the inexperienced investors think “oh, maybe the rumours are true, I’ll
sell at £3.00 and put my money into something else which is going up (e.g.
Range)”. Those posters on iii.co,uk and LSE boards must be “in the
know”. A classic Bear raid! Of course, by the time they’ve sold and moved
into something else, that's goes down as well. Get the weak to sell and the
shorters feed off the frenzy. When they’ve got their man, they switch and
start buying. Whilst the sheep were selling the last few days, I’ve been
topping up. Not putting up with any market maker or shorter nonsense! Hope
they’ve closed their shorts now!!?
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