A few big calls of ATH and price booms today so thought I'd temper expectations and tell you what I'll be looking as there's both positives and negatives going into todays session (and I'll hopefully actively trading it).
The big profit numbers are the key focus and obviously a huge positive for the company and for the most part quite an impressive report all around.
Which is why OS markets rallied hard on the news and holders should expect some upside today.
However, there are a few underlying factors that any trader/investor may want to take into account before throwing the kitchen sink at PLS.
I just mentioned OS markets and although they can be a good indication, too many people put too much emphasis on markets that basically have less combined volume than the opening trade on the ASX. This makes for easy 'set ups' from MMs when trying to direct traffic to the most profitable prices for themselves.
OS markets did have double digit gains overnight but they are the last indicator I look toward when planning the day ahead.
Looking at the daily chart and PLS does look to be reversing last weeks sell off which is good.
Although profits were booming the report was actually underwhelming for analysts, as you can see by the earnings miss.
This is somewhat important as the the guys with money to move markets generally want to see upside surprises when looking to buy in for future gains.
The issue of rising costs for FY23 are another obvious negative that may effect forward pricing.
The other thing that stands out on the chart below is the POC (the most traded price) since PLS bottomed midway through last year.
The POC is marked by the big red line on the chart and currently sits at $4.81.
This is important as it shows where the most institutional interest is - so the reaction off this price matters.
A break and hold to the upside is very positive.
A rejection from this price is not so great for long holders
PLS Daily
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Now lets talk shorts.
Plenty of people expecting a decent short burn today - and so they should - but movements in short sales over the past week make things very interesting indeed.
I'll explain.
Last Friday and Monday (and Wednesday to an extent) saw a huge uptick in short sales.
This action is not congruent with retail positioning, so it's kind of important.
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You'll see on the 15 min chart below where all of the shorting took place, with Fridays huge short action being the one to focus on and it's no surprise that the most traded price was above most of the rest of the weeks trade.
A few assumptions can be made from this data.
Firstly, the rise in sp off the lows on Monday have been majority of shorts closing positions - not smart money taking long positions (this matters).
You can see Tuesday tested this price a number of times and was rejected (as instos will protect positioning)
Only yesterday did the sp break this price - which turned out to be a good place to go long from
On a positive note, there should be a number of short positions caught out today which should spark a decent rip if price gaps up.
What holders don't want to see is price pushed higher on only shorts as this will provide a quick sugar hit only but lack of follow through will most certainly end in price heading lower once more.
A good price to watch is $4.81 - if the sp can break and hold this level then it will be very positive indeed.
($4.75 is another important price when looking at VPs, so keep that in mind)
Going back to short sales again and there is potential that these shorts were taken with longer timeframes in mind.
Mondays and Wednesdays main accumulation zone is between $4.20 - $4.26 if price was to drop back here in the ST then we could see things unwind quickly if it broke lower.
PLS 15min chart
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On the macro front Lit ETF had modest gains but some of the lit majors had some solid upticks overnight.
If there is one lesson we can learn from ALB then it'll be the earnings stitch up.
Last Wednesday saw earnings which gave modest gains on day one then a boomer day on the next day.
However, the sp was absolutely smashed in the next couple of sessions.
This is where it comes in handy to not throw the kitchen sink at something cause of one or two good days.
The last two sessions have been postive for ALB but hardly pulling back any of the proceeding days losses, so not something I'd be getting too excited over.
All up, a great report for PLS and good outlook for whats ahead, just thought I'd highlight a few points some may miss.
Anyway, that'll do it for me.
All the best, trade safe and good luck whichever way you trade...
(20min delay)