Weekly Review U Stocks - 15th Sep 2023
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. As I have disclosed earlier I do hold a number of U stocks. This is the reason I include a number of other U Stocks in my analysis. In my figures, I also have performances of U stocks for 2021 and 2022 - for those interested in looking at longer term view.
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Please note that all my analysis are from a trading perspective looking at short-term view.
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There are no new additions this week, so my stock list contain 28 stocks.
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How are we going in 2023 - General Markets-
- SP 500 after making a few 52 week highs and crossing 4600 is still in pullback mode, and in a choppy stage
- At this stage its at crossroads, same as last week - delicately balanced, but the odds of going down slightly higher than going up in immediate short term
- For the week it didn't have a strong direction in one way. Overall last week it finished at 4457, this week at 4450 - so at same level, very slight down
- Upside - another retest of 4600 before getting to 4800 all time high. Many talk of 4550 as key level
- Down side - 4420 first key level, it is toying with that. Many feel a test of 4300 is coming, and more importantly even 4200 is a good possibility
- Overall trend from October is still uptrend. There will be pullbacks. So at high level (those holding longs etc) the uptrend is still intact. Those looking for swing, short-term trades, some volatility may be in place
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What will happen next week - General Markets:
- US markets had a big drop on Friday, over 1%. U stocks were still in green and Li stocks were mixed. ASX may have the same trend.
- Some believe Friday drop was due to Quadruple Witching (expiry of options) and played by Market Makers to maximize their gains, Others think its a delayed reaction of higher inflation CPI/PPI we received. Early next week will confirm.
- SP 500 now in real test of another pullback. Friday action are pointing possible test of 4420, 4330, 4300 and 4200 in that order. The odds of a these reaching has increased after this week, so 3 to 6% drop. The likes of Michael Burry who has shorted 1.6b think 15 to 20% drop
- Mixed lead indicators - more negative than positive. VIX still below 14 which is good and bullish. But Yields and Dollar Index strong - so not good. Bitcoin after 31k touch now in slight uptrend after falling near 25k - above 26k and shrugged off the weakness of markets on Friday. but not rallying much
- Some signs in crack of economy - Banks, Housing in US, China and now Inflation Increasing suddenly gripped fears in minds of many
- Interest Rate decision next week Wednesday - FOMC. Powell will speak. 97% chance no rate increase, but if its otherwise or Powell speak (hawkish/dovish) may provide strong direction
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Personally: My situation same as I mentioned last week. Mostly U stocks and few scalping in others. U stocks 60% have gone long and 40% I am trading short term, hoping to catch up and down, but have left on average 60% to run as we are in a strong uptrend. At this stage both general markets and U sector doing all right, so will continue unless I see a strong message otherwise.
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Stock/Sector specific Info:
- We are now playing in in the undecided state, the two zones are 5.9 to 6.8, and next 6.8 to 7.8. Its toying around 6.8, did few pips up and down on Friday, may be waiting for some confirmation before next move
- Monday there may be another attempt towards 7.8, but the success will depend on how other U stocks are doing.
- Personally for U stocks I am 60% long on average, for short term trading I am holding stocks from last week around 30% and 10% I have kept cash. I also try to do rotation as some stocks are hot sometime and then go cold. Eg EL8 suddenly there is some minor weakness as someone is trying to exit. It might be genuine, like a CR though they have around 10m but who knows. Also 92E after ordinary result, but in a run, everyone runs. But got our of OKR after holding from early 8 average. So I play these small 10/20% shifts between strengths of stocks. Sometimes it works, sometimes not, but I like to play like this
- On Friday US U stocks were slightly up after a bigger rise in morning. Still it was very positive and a number of stocks again did their 52 week highs and had still decent gains for the day
- U stocks gained 16% this week - 12% up for the year
- 7 stocks made a new 52 week high - so leaders making the right move for others to follow
- U future gained $1.25c this week to reach $62.00 (Trading view, many platforms are above 65 I think). So very good last 2 months. Next target was a number so many were using in 2021, general consensus was it has to reach 80 (and stay above that, no kiss and come back) for some to start production
- I still believe we are at least 50% dependant on general markets for continued gains. Eg on Friday if markets were neutral, US U stocks would have gained around 3 to 4%, but since general markets were down big time, gain was reduced to 1%
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.Cautions
Although we are in Euphoria stage where many may feel that nothing can go wrong, its always best to be on guard, especially looking at history, previous rises etc
- Caution 1 - Last 2 years, U stocks peaked in September and then had decent drop. This year could be different, but something to keep an eye on
- Caution 2 - Supply squeeze still no CLEAR data, so unless we get confirmation of this, things can fizzle out. When months back Spot Price was decreasing and had gone high 40s, many pundits to comfort were saying that it does not matter because Spot Price is irrelevant - hardly any trading happens there and volume is so low that any one can manipulate. When its rising, no one is talking about that, instead its most important now
- Caution 3 - U sector worldwide is very small. I think worldwide around $50b which may have increased now, but in that range. NVIDIA last week in 2 days lost $200b. So just one stocks volatility in just one day (100b) is double the total market cap of all U stocks worldwide. So there is danger it can be easily played out, so just to be careful
- Caution 4 - General markets is still a factor. If it tanks big time, it will take us down. If small drops in general market, like on Friday, U stocks can absorb. General markets many feel can see another 3 to 6% drop, but who knows we can just go higher
- Caution 5 - Last week I did a post around strengths and weakness in detail. It is still valid. Here is the link
https://hotcopper.com.au/threads/age-weekly-report.6580138/page-3#post-69801475
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Here is the Figures for the Week:
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(20min delay)