Signs of reversal?
Yes SYA gained 3 pips to finish at 4.2c on a decent volume of just over 109m shares traded. A very good play today after running it down yesterday. Price wise was good, open at 4, low of 3.8, high 4.3 and closing above open and close to day's high at 4.2. Not much to dislike from numbers/chart perspective. Key number for me is still 5.1 to give the buffer and strength of coming out of bottom - 5.1 was our previous low before we went down the path of 4s and 3s. Lower number - don't know, shorters get in control and I feel they could push down easily if sentiment is weak.
So are there signs of reversal? Possibly, but still early to say. The Li spot price which is down over 80% for the year, lost only around 1% or so in last month - so rate of decline has slowed considerably. Last couple of days we are also getting daily green in spot price. So signs of bottoming are there, whether it continues, is to be seen. Secondly, I had written yesterday that ALB is one of the key indicator of Li market sentiment (along with a few others, for simplicity I follow ALB). Yesterday was a critical day sitting at 119, either going to 52 week low of 112 or first stage 127+. Nothing very dramatic, but it has moved to 122, still some way to go. Thirdly, if there is going to be reversal, some of the big stocks usually take lead. For the second day in a row we saw bigger stocks like LTR, SYA, WC8, INR, LRS etc finishing in good green, average around 10%. Many others too in green, but not much at this stage. But going in right direction. So all this pointing to some change in momentum, but still early days.
Personally no trades for me. As I had written last week, my average is at 4.3. I had decided to stay put even on weakness as somehow I get a feel we may be near or close to bottom, so going with that feeling for now. But have also decided not to buy lower to average down. Will only buy more once it goes up. May not be best type of play, but after watching it for so long, suits my type of play. Previously had exit at least 10 times coming back from 20s..
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So what may happen tomorrow? A good day yesterday for US Indices as well as ALB, though not all US Li stocks were in green. But it was enough to give some hope to all beaten down stocks. Many are waiting for signal and may jump as the sentiment improves. We need a follow up tonight on US Li stocks. If that happens, many may cut loose tomorrow. Will that happen? Lets hope so. All the best.
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