ESS Daily Report, page-13

Another tentative Monday on top of China issues?

Yes ESS lost 1.5c to finish at 40.5c. Our volume was much lower, just over 1m shares traded. Getting into danger zone now, need to hold 40, hopefully if markets behave.

ASX Li stocks declined along with most resource stocks. Of the 54 stocks that I track, average decline was 2.5%. A number of factors contributing to steady decline in Li stocks include general market, reports and now this China situation. Stocks are the weakest in over 2 weeks now and today's trading again reflected many want to be risk averse at this stage. Sentiment is low now. Many stocks breaking their key resistance levels, some barely holding it. We need macro condition including general markets to pull us up. Lets hope we get that soon.

What next:

Will keep it short as covered some in Weekend Report.

The decline in resource stocks which started couple of weeks back continued today. The situation in China not helping the cause.

SP 500 is reaching a very critical level - the test of 200 day moving average from which we have failed multiple times this year. Lot of analysts feel that it may happen again. But there are some who believe we may cross this level around 4060 and get to next around 4150/4230. Crossing this may signify a bull run, else will be classified as another bear market rally. On decline, we need to hold 4000 and 3900 if we go there, else we may have a bigger fall.

So what will happen tonight? Unpredictable but China situation has given a fodder for red. Futures are already red. I still feel the technical battle between bulls and bears at key resistance levels will be the main driver rather than China. There is a chance from technical perspective that we should go another 2 to 3% before a final showdown (unless we get shot by 200 day moving average). Will that happen? Lets hope so. All the best.