Weekly Review Li Stocks - 1st Jul 2022
Here is the weekly review figures and charts that I do every week. It is useful only for those interested in trading or those who hold multiple shares and based on performance would like to keep re-balancing as we go. I do hold a number of Li stocks and like to trade. This is the reason I include a number of Li Stocks in my analysis.
Please note:
This is no reflection of all AU Li stocks as I have only included those that I am interested. In my list are shares that I hold, held before or planning to buy in near future. Since this is my list, I may have missed some good stocks. The averages are simple averages and not weighted averages. So the average don't reflect AU Li average. This is just for my tracking and analysis. I have both ASX and US stocks in two separate figures.
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This week I have not added any new stocks to my list. So my list has 43 Lithium stocks.
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Please note that all my analysis are from a trading perspective looking at short-term view.
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This week there is no Diary. I am adjusting my portfolio due to two reasons - first and mainly around end of finance year and secondly volatility that is happening in the markets. So having a lot of changes in my portfolio - one planned (EOFY) and second unplanned (volatility). As this is specific to my situation, I thought I will hold on sharing that for now. Hopefully back soon.
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Are we at or close to bottom
- I did a lot of reading this week, but have not reached any conclusion
- After reading and watching a number of things, I feel at this stage nobody knows what's going to happen
- There are millions of data and thousands of charts - same data/chart is interpreted differently if one is a bear/bull
- Eg VIX - the volatility index is still decent around 26-27. The bears say that shows we are not near bottom as they expect high 30s. Bulls say that even after indices losing 20-30%, VIX says that we don't have much further to fall as punters are not worried
- We are also into new territory - like unprecedent first 6 months for some indices. So many chartists relying on previous behaviour do not have something to relate. Again based on bear/bull approach - both sides can make their points happily
- Overall though - more bears than bulls, including finance groups/brokers
- Conclusion - Individual to decide what to do. One thing we all do not want to be in - when the reversal happens, we are not left holding cash (buying/topping up) as we were waiting for some other signals or looking for it to go more down. It will never be possible to predict exact bottom, so close enough should be good. For people to take some risk, if they feel we are within 10%, start buying in tranches (like 3 to 4 lots to average out). If one is risk averse, wait for better sentiment - chances are that one may miss the first 10-20% of rise, but less chance of losing.
- Personally - After reading so much, I am more confused than before. Last week I said I would at this stage possibly try to day trade/short trade for a day or two with aggressive stop loss - I am thinking of continuing in that mode for now. Following week (from 11th) reporting season starts and we get CPI figures - I will wait for that unless we get some very good signals this week.
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Something to keep in mind this week:
- Stocks are in constant decline after reaching new highs in April
- First weekly gain of 3% after 5 weeks of decline
- Many stocks have lost 60-80% from their recent highs - big falls can be seen, lot of catching up to do
- For the year now, average loss is 1%, drop from 5% loss last week. This is the second week in this financial year that I am reporting negative yield.
- Markets are still volatile. Individual risk appetite and expectation should drive trading.
- There are some signs of decoupling from general market, but general market is still over powering everything
- The US markets on Friday was green. The US Li stocks though mostly were in declining - some decoupling happened on the wrong side
- Few weeks back I had shown that US Li stocks had lost 13% where as ASX Li stocks 43%. So I was hopeful that ASX Li stocks will make big gains. This week US Li stocks dropped 8% where as ASX Li stocks gained 3% - so we are getting towards parity now. But not the way I wanted - I was hoping ASX rise not US falls. Anyway, margin is now decreasing between ASX and US Li stocks, as I expected
- Prediction - Stocks will start strongly this week, though at this stage I am not sure if we will be able to keep all gains till end of week. The general markets will provide direction. - (This is the same I wrote last week and pattern is similar as Us indices had gains Friday week back as well)
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Something Positive:
- We have declined significantly, probability is that even if we fall from here, it should not be much. So risk/reward is getting skewed towards buyers
- US Li stocks have held well and done better than ASX Li stocks. This week of 7 US Li stocks that I track, they were 8% in loss though.
- I did a lot of reading this week around general market conditions. Although lot of pessimism is still there, some charts are indicating that we are getting closer towards the bottom within the range of 10% - but pleas dyor as market is on decline
- Once the plateau happens, once the price gets above 200 day moving average, many punters will get in. This may still be few week or months away, but those optimistic - for sp to move above 200 dma, sp decline should reduce from here and slowly catch up towards the line. But please dyor
- US indices rose around 1% on Friday. Is it sign of reversal or dead cat bounce? Lets see
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Here is the Figures for the Week:
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Figures for US Li stocks:
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(20min delay)