Weekly Review U Stocks - 7th Jun 2024
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 last year - 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 contains 33 stocks.
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.This week I don't have anything in my Personal section (holdings, price etc) as I have been shuffling some stocks for June tax transactions. Hopefully back next week.
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How are we going in 2024 - General Mark
- SP 500 continues on a rampage, a new all time high at 5375, finished at 5346, a gain of around 1.4% from last week 5277. It is on an incredible journey, and the usual seasonal sell in May and go away has also been brushed aside. Many analysts have been waiting for a correction, it will come, but who knows when. It could do more gains so that 5000 becomes a big lower play.
- Volatility Index VIX is at 12.22, a decent drop from 12.92 of last week, - continues to stay in strong bull territory, there was some rise last week, but no more
- Bitcoin looking very strong, another decent play in 70ks this week, currently at 69k but bullish
- Sentiment Indicator - still at Neutral at 45, last week Neutral 48, before that 53 - so again a big divergence is there, again a lot of punters not believing that this rally will go much further ahead, or thinking a correction may be in play, so although SP 500 is going up, the mood is not yet upbeat, something not to be ignored, could be an indication of correction coming in general markets
- Russell 2000 is doing very bad. Not good for resources, commodities, risk on assets. It was already lagging other indicators big time. This week further slide, lost over 2% for the week, effectively going in opposite direction to SP 500. Not a good look, in fact, very concerning. Currently at 2026, drop from 2070 last week. Many worried it could shortly drop below 2000 which will mean more resource stocks are down
- Yields some good drop after inflation numbers, but still high enough, not indicating rate cuts coming soon
- Dollar Index came down this week, then again rising another divergence says market needs to cool
- Gold, Silver and Oil . all took hit this week
- Last week I wrote- overall one can be optimistic this week, depending on one's risk tolerance. I feel this week is to play with caution - something does not look right, but lets see, markets have defied these sentiments before as well
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What may happen next week - General Markets/U/Li/REE:
- SP 500 is still in strong territory. Many still believe we may see a correction in June, but last week's trading indicates its not yet ready. So lets see, I think this week will give an indication for the rest of the June
- Russell 2000 is key for us, commodity/resource, we want that to go up - its not doing great, lets hope things change - its been nearly 2 years now
- Key economic data this week around - Big week coming up, Inflation data, Fed Rate decision, FOMC minutes - so we may get some strong direction this week from numbers, unless they are all expected figures. At this stage, it is expected that numbers will drop, so if it does not drop, markets may not like it
- Uranium Sector overview - I made a call several weeks back that CCJ will make new highs between 55 to 60 in this phase of rally. It reached 56.24 previous week. 3 weeks back I also first wrote that the current rally will peak in next 2 weeks. Many big ASX U stocks made 52 week high during this period. This week ASX U stocks lost 9% on a weekly basis. What does it say? Did my prediction that we would peak out by end of May turn correct? Will CCJ also fall down and 56.24 become the high of this phase? Very early days, but there are indications. The sector is still in a bull pattern in last 6 months, so correction can happen. Or we may not see a correction now and continue to rise. Its best not to make assumptions but follow price action. Last week I wrote on a number of U stocks where I write that I had sold a fair few because I was thinking we may peak here, as well as ASX June tax transactions. This week I had a small play, which I have got out. I will be watching, will get in immediately if I get signs that it wants to continue. But my gut feel is we will see a correction. Last week the big ASX U stocks which made highs, had fallen 10% from their highs. This week they are sitting at 15%. If correction happens, I an thinking we could a drop between 30 to 40% from their highs. For those long, they may ride this (if it happens), because riding the plays has played out very well till now. My comment and play is only for those who want to do short-term trading.
- Lithium Sector overview - Last week I wrote that - "Lithium sector is back in the weakness zone, based on the reading I use, others may disagree". This week I feel we are in serious trouble. ALB lost another 4% for the week. I use 128 as getting into neutral zone, SQM 50 - both are below. ALB had to hold 118, it tried but failed. Next stop is to hold 112. Currently sitting at 114. Otherwise the 52 week low of 106 is in danger. So a tough time coming up. Ganfeng too lost 3 % for the week. So overall indicators are on decline. Many of the bigger ASX Li stocks, which are more representative of direction, were in red, average decline around 5% for the week, including, PLS, LTR etc. Same thing happened last week, 5% drop. With ASX June tax transactions coming up shortly, we could see more volatility. US general markets also a bit iffy. So no big support from macro may come. US Li lost 6% this week. Last week they lost 7%, before that lost 6%. So in 3 weeks it has lost around 20% - that is very concerning. Many stocks making new 52 week lows every week. My sentiment is to play with extreme caution, especially around new plays. But things can change quickly, so best not to make assumption but follow price action.
- REE Sector overview - This week REE stocks a similar play like Lithium, and many stocks were in red, made a weekly loss of 4% across 30 stocks I track. This week I had to get out of my favourite stock - WA1, which I was holding for several months and writing every week about it. My hold was from $8. I have seen volatility and 10% swings many times, but when it was reaching 15% I got out, just over 20. In most plays, I usually get out if it drops around 15% or so, start thinking from 10%. That's my normal play on all stocks , so I stuck to the discipline. I still feel it will come back, so will look for a re-entry. Other REE stocks nothing spectacular, except BRE make new highs. I have been writing I had picked up BRE few weeks after watching it make new highs, so it is still looking very strong.
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Personally:
I have been shuffling around some stocks due to June tax transactions, so thought will skip this week my holdings etc. Same thing I have been writing for last 2 weeks as well. But I have been. Last week I wrote I had got out of a lot of stocks, my usual cash holding was 20%, last week it was 50%. This week its at 65%, as I have got out of U sector and a big REE stock I was playing. So I am taking a stab that general markets, ASX June tax transactions may cause some weakness. But its a "may". One thing I have learnt in last 2 years, is not to assume anything strongly. Have an opinion, a play, but change quickly as the numbers come up. So lets see, an interesting month coming up. As I write categorically, all my analysis and play is for short-term trades. Most people are long, for them its just a nuisance to get thru.
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Stock/Sector specific Info:
- This week AGE playing in 5.3/5.9 zone mostly. So we have lost a zone of 5.9/6.8. AGE played with weakness this week. With ASX June transactions coming up, and U sector looking like topping, an uphill task to get to 6.8. But anything can happen.
- From a weekly perspective moved from 6 to 5.7, also touched 5.5. So 5.3 on weakness is in play. For strength, at least needs to get over 5.9
- No ASX U stocks did a 52 week high this week, again this week. Reflecting the hesitancy which has come to the sector - have we topped for this phase? Will there be a correction?
- U stocks down 1% for the year, so not a good look, though most big stocks are still well in front
- Last week I had written I had exited most of my stocks at average 6.2. Have not yet bought.
I also exited all the big stocks I was playing, had got out most last week, I had held a small amount to see what happens, I didn't like the play, so got of them as well - U future is now at 87.40, last week at 89.90, lost 2% for the week. Spot price also showing hesitancy, has dropped close to 20% from its high, also showing signs that we may have peaked for this phase
- As I wrote above in my review, I am thinking CCJ will go somewhere between 55 to 60 and then consolidation/correct 15/20%, next rally September. We have reached there, but at 55/56 another play towards upper range of 59/60 could happen. Who knows it could get just smash thru to and get to 70. Odds are not high, but possible, hence I mention following price action
- On Friday US U were in red. But we will have another session on Monday as ASX closed on Monday, so lets see
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Here is the Figures for the Week:
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(20min delay)