Li stocks in another strangehold?.Yes AZL lost 2 pips to finish at 2.5, on much higher volume of over 21m shares traded. First time double digit volume in around 2 weeks.
.
So it looks like the Lithium stocks, both US and ASX are in some form of strangehold, someone holding them back. They don't want to go anywhere now. Most made their bottom in first week of Feb, gained decent amount in 3 to 4 weeks, but last couple of weeks have gone into a shell. Usually in this scenario, there is a drift down and that's what I am seeing in most Li stocks.
I have been writing for quite some time that ALB needs to get over 128. After it plummeted from 140s in early March to 106 a new 52 week low, it is trying, above its 106 level to 124 currently, but crucially not above 128. As I have felt, anything below 128 for ALB is weakness in most Li stocks, ALB made two attempts to get over 128, once over a week back, did get over 128, but came back intra-day down, as if stung by a bee. Yesterday also same reaction, was just under 128, and again met the bees. So the weakness continues and that is what we are seeing in Li play.
AZL too playing the macro. Two weeks back we finished at 2.4, last week 2.8, this week back at 2.5. So small to and fro keeping a small number of punters busy. Rest all waiting for the real game to begin.
Personally I am playing with soft hands till I see a momentum swing, for me the first thing would be to see ALB to get over 128, but confirmation would come in 140s. So half commitment at this stage, selling some and waiting for last few days
.
So what may happen next week? All depends on US Li stock. Using ALB as a barometer, if it fails to get over 128, we could see the drab play continue. But if it gets above that, we could see some hopefuls get in, 140s we could see a decent rise in most Li stocks. Till that time I feel its individual play, those playing long could hold, those playing short-term may wait for the trigger. US indices are going up, but Russell not that much. In fact the big tech stocks are gaining so much, that punters even taking out money from resource stocks and putting there as that is giving a better return in short-term. We need the reverse to happen, so all the gains in indices, in big tech stocks, not helping resource stocks. But hopefully one day things will change and the reverse may happen. Or Li macro spot price continue to rise so that at some stage punters believe that it may be for real rather than just a bounce. Then we may see decent gains. And gains that will be held. Will that happen? Lets hope so. Enjoy your weekend and all the best.
(20min delay)