AE Portfolio Aggressive Holding Iluka Resources Ltd’s (ASX: ILU, OTC: IKLAF, ADR: ILKAY) steep decline accelerated Wednesday in Sydney on the Australian Securities Exchange (ASX), as the shares did about six times the trailing three-month average daily volume.

The stock shed another 8.3 percent to fall to AUD12.85 at Wednesday’s close Down Under from AUD14.01 on Tuesday.

Short-sell volume for the day was 6.43 million shares, about 33 percent of the overall total. And total volume was about

On Monday Iluka reduced its 2012 zircon output and sales target due to soft current and difficult-to-forecast-going-forward demand. We detailed this announcement in a Tuesday Flash Alert, wherein we reiterated advice first offered in a March In Focus article. The long-term story is still attractive, but the short term is going to be very volatile.

Iluka Resources is a hold if you own it; do not “average down” in this stock. We’re reducing our buy-under target–applicable for only the most aggressive investors–to USD16 on the ASX and the US over-the-counter (OTC) market.

If you already purchased the US American Depositary Receipt (ADR) on the US OTC market, hold. New, very aggressive money can buy the ADR, which represents five ordinary shares traded on the ASX, up to USD80.

As short-sellers pounce six analysts have reiterated their ratings on the stock.

Macquarie continues to rate the stock “outperform,” which translates to “buy” according to Bloomberg, and held its price target at AUD20. JPMorgan reiterated its “neutral,” or “hold,” rating but reduced its target from AUD18.70 to AUD14.50.

RBC Capital Markets still rates Iluka “outperform,” or “buy,” but cut its price target to AUD20 from AUD22. Deutsche Bank advises investors to “hold,” which means “hold;” the new price target is AUD17.80, down from AUD18.85. RBS still rates the stock a “hold” but trimmed its target from AUD18.04 to AUD16.16.

And the famous “Vampire Squid,” Goldman Sachs, says the stock is a “buy/attractive” at these levels, though with a reduced upside of AUD22.50 from AUD24.50.

The buy-hold-sell line, according to Bloomberg’s standardization of Wall Street-speak, stands at 11 “buys”, five “holds” and one “sell.” Even after the price-target reductions from these five houses the average among analysts is AUD19.01.

We will have more on Iluka in the May Australian Edge, which will be published this Friday with e-mail notification sent to you Saturday morning.