AZL (ASX) AZL Weekly Report

Weekly Review Li Stocks - 18th Nov 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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Please note that all my analysis are from a trading perspective looking at short-term view.
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I have also included my Diary - predictions, my holdings, my plans for the week. Caution around Diary - This is just my opinion/plan. Probability wise one person can be wrong many times, even all the time, so please use information accordingly. So for those who like leisurely reading, enjoy.
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There are no new additions this week, so my stock list contain 54 stocks.
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Overall for this week - General Markets - SP 500 - For over couple of months I have been calling that we need to be above 3900 on SP 500. Also, a big likelihood that we may test 4100/4150. After much ups and downs, we closed at 3965 on Friday. Last week we closed at 3992 - so slightly down for the week. But the good part - first level to hold was 3900 and the lowest we went was 3906 - so that is as good as it gets. From an upside, we wanted to test 4100/4200 - that didn't happen, maximum we went was 4028. But overall the trading range for the whole week was between 3900 and 4000. A clear sign of consolidation. What will happen next? Frankly anything. But for last couple of months I have been saying after rising from 3500 that we may test 4100/4200 - I still feel that is on the cards. So overall a decent week, more on positive side from general market indices perspective
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Overall for this week - Li stocks - One of the very weak week for Li stocks. Some reports again talking about demand/supply and spooking punters. US Li were at the weakest week. On first 4 days average loss was over 3% everyday. Friday some semblance of balance. Overall they lost 14% for the week - one of the biggest drops of recent times. especially considering that general market only dropped around 1% for the week. ASX Li stocks also showed weakness and many stocks, especially big ones have dropped around 15% from their recent highs. All this is signalling that there is a bit of turmoil in Li space and many are selling out, probably institutions to make such a big drop. Macro is still strong. We have gone thru this phase once and come back stronger. I feel we will again. But something to watch for, especially those trading for short-term. I will be looking for a firm reversal before buying back that I sold, even if I have to pay higher, luckily most are down from my sell price as on Friday.
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Risk-Reward from here ( this is still relevant even after three weeks and hence copied from my 4 week back weekly report. Its still relevant and is partially paying off. We have not yet got full gains, we may be at starting point, and upside could be still huge - hence its relevant):
I have been following the price action very closely, in my figures, rise from June bottom etc.
There is a chance we can have another sell down next week on indices - we could reach lower low (below 3491 on SP 500) or higher low.
At this stage, punters, markets have factored in all bad news, most feel we are near bottom, if not we have seen bottom.
If indices were fall, even big, stocks that I follow would drop another 10 to 20% - most likely another 10%.
But if what I am reading and seeing in price action is that we are near bottom or seen bottom, and its time to rally, we are looking at gains between 40% to 100% in next few months - individual stocks will carve their own path though where they fall
So at this stage of market - Risk-Reward is very good, one of the best I can think for a while
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Next week SP 500 and other indicators path:
A big week coming up. I have been calling for a big fight at 4100/4150 level - its on now
For next week - first target around 4100/4150 - to get over 200 day moving average - that will be bullish
Next immediate level is 4200 - long term trend line sloping downwards. Overcoming this will be another bullish sign
If we cross 4200, we don't know what will happen. Very few contemplated that we may reach here. We may have to take one step at a time and look what happens.
For those not convinced of the rally, profit taking can happen at levels I mentioned
Yields are decreasing, Dollar index falling, VIX falling - all positive for stocks
No major economic drive for next week.
Next Thursday US markets closed for Thanksgiving and shortend day on Friday. Thanksgiving is a happy moment in US calendar, with stocks usually in happy mood. So probability of that remains
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Personally: I still believe risk-reward is good. But short term volatility is there. This week I sold out a number of stocks (all in my Li Dairy), some at small loss, some break even, some in gain to manage this volatility. As on Friday, I was 35% cash. I want to buy, but waiting on something to give me direction - Firstly it can be price action and stock price start rising. Secondly, if we cross 4000 on SP 500 then there is a very good chance of another 4 to 5% on index, which can bring another 20% on stocks. after that we just need to follow price action. For those long, it does not matter, hold tight.
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.What are analysts saying - Analysts in general feel we may see 4100/4200 on SP 500. But half the analysts are still resolute that we are going back to 3200 on SP 500 - another 15 to 20% down on Index, even if we reach 4200. They have not given up even after good economic data on inflation. If there I was one thing I was worried - its that - these analysts have not changed their opinion. There are others though who feel we may have seen bottom of this phase from Oct 13. So we have to keep adapting as events unfold. No one knows for sure, and analysts are also confused.
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..Stock specific Info:
Its trading in zone 7.7 to 8.3
It will need news or general markets to turn to go beyond that.
I had to exit half my trading positions at 8.1 this week as I could feel markets were weakening. I had bought at that price, so exited half at break even. I still hold half plus long stocks
I am hoping I can buy back below 8.1 if markets turn to positive
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Here is the Figures for the Week:
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Figures for US Li stocks:
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Rise from June Bottom:
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MY DIARY - its good, but please be careful !!
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