Weekly Review U Stocks - 28th 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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How are we going in 2024 - General Market
- SP 500 continues on a rampage, although it took a pause this week, 5460 from last week of 5464. So the run continues and no signs yet of some correction which many analysts are waiting for months.
- Volatility Index VIX is at 12.44, continues to stay in strong bull territory
- Bitcoin looking shaky after strong run from 17k, but still within correction zone, at 61k now
- Sentiment Indicator - on 44. Fear, better than last 2 week of Fear 38 and 39, but with stock market at its highest, it should be at least Greed, over 50, if not Extreme Greed over 75 - shows punters still thinking correction coming, a clear divergence, but this divergence is now for several weeks and stock market is still going up, so not a great short term indicator it seems
- Russell 2000 is doing very bad. Worst performing index. No wonder commodities, risk-on assets, Lithium/REE etc struggling. This week though it finished at 2047, up 1%, best performing index this week - is the tide turning?
- Yields still not giving any signs of immediate rate cuts
- Dollar Index at similar level, in fact going up, another divergence
- Gold, Silver and Oil - no clear direction this week, in holding pattern, very slight positive
- So overall markets doing well, but not commodities, resources, risk-on-assets - so many may think the journey is yet to begin for them
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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. I said same thing last week, I feel its the same
- 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 - No major economic data this week, technicals will take control, I feel
- 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 on 31st May. Two weeks before end of May, I wrote there is a very good probability we will do tops in next 2 weeks. Somehow it played out that way. I wrote that after this CCJ may go towards 45, on Friday it play in 48. I also wrote, especially for high flying ASX big stocks which made huge gains, that they will peak by end of May, and then lose around 30 to 40%. Many have lost nearly 30%, some even more. I still feel it will go down more. Reason being I am thinking we may bottom when CCJ reaches around 45, still some time to go for that, another few weeks I think, It will drag most U stocks down. If CCJ reverses from here, all bets are off and we could look for reversal in the sector. If CCJ loses 45, then 39 comes into play, that will be very bad for the sector. Odds favour CCJ bottoming at 45 in another few week. Next high around 65 we may see in September. That's the play I if it looks like happening that way, else will follow price action - no point in assuming anything. Till now my predictions have been close to what has played, but I may have been lucky in the calls.
- Lithium Sector overview - Few weeks back I wrote that - "Lithium sector is in serious trouble". Nothing has changed. We are in more trouble. At this stage, one would think the sector is nearly dead. No new money will come here. Just in last 6 months, across ASX 90 Li stocks, we have lost 41%, only 5 of 90 stocks is in green for calendar year 2024. It is dire. Every week a lot of stocks make fresh 52 week lows. And its going like that for months now. We all though Feb 6 lows may have been the low for the year. Not to be. Recently many stocks breached that. Few days back, China stocks rose around 8% in a day - many thought this reversal, next 2 days it started giving it back. So overall, extreme caution to play this sector. Of course, if things turn round, it can turn quickly, those buying now would do very well. But more risk averse would think of waiting, seeing some signs of reversal before committing. Its individual risk/reward. 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 - REE stocks overall have done better than Li stocks. Last 6 months average drop across 30 REE stocks 8%, compared to 41% for Li stocks, U stocks dropped 13%. But there is a story within the REE sector only some stocks are doing well. 7 stocks have had gains of over 50% in last 6 months, 22 stocks are in very good red. So stats play, if one doesn't have a favourite stock, and wants to play the sector, then stick to winners, at least for now till over Li/REE sentiment changes. Many small REE stocks also having big runs. This used to happen to Li stocks couple of years back, now it is unheard of, such has been the battering of sentiment in Li that even occasional runs for one stock takes months to appear. So REE still doing better in that field. .
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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 4 weeks as well. But I have been. Couple of weeks back I wrote my cash was at 75%, as I have got out of U sector and few REE stocks. I am holding some Health stocks which I have been writing for months - DXB (average 30.5), BOT (19.5), PYC (average 8.3) - fortunately all are up. I wrote how I got out EYE fourth health stock I was playing, my buy was 23, I got out at 27 as I didn't like how it didn't go over 30, now its at 22.5. Eyeing a few other health stocks which I may write shortly - both Li and U sector at this stage not doing great, so trying something else till they come back. And some Oil/gas stocks.
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Stock/Sector specific Info:
- This week AGE playing in 4.6/5.3 zone mostly. All the plays this week happened between 4.9 and 5.3. So we have definetly got out of 5.3/5.9 for now.
- From a weekly perspective moved from 5.2 to 5.3, so nearly flat. This week, I feel if things go bad, 4.6 may come into play, otherwise lets hope we move toward 5.9, to get 5.6 may be a good sign
- No ASX U stocks did a 52 week high this week, again this week. We are clearly in correction zone now
- U stocks down 13% for the year, so not a good look, in January we were in front, in mid 30s, so a big turnaround
- In May 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, 80% by before end of May when I made a big call that we will drop here, rest in first week of June
- U future is now at 85.75, hovering around mid 80s for last few weeks. No clear bullish signal currently - for short term
- As I mentioned above in my review, it looks like may have topped end of May. CCJ may go towards 45. 6 weeks back I had written most U stocks will lose between 30/40 - many have already lost in that range. There is a chance now it may even reach 50%, especially if CCJ drags down the going to 45 for few weeks. If it is swift and done in a week, that will be very good. But if drags down for 3 to 4 weeks, say bottoming at end of July, till that most U stocks may not rise, chances are they may drop a bit more. Hence the drop to 50% comes into picture. But lets see. Many believe a lot of sell has happened due to tax related transactions, targetting end of June. If that is so, it will be very good and we can reverse from here. But pattern trading tells me bottom end of July (+/-) and next second half of September. As I always write, we should have a theory, but should adapt to any changes, best to follow price action. Last 4 weeks price action has been down which played as I thought.
- On Friday US U were in big red, first time CCJ went below 49 after crossing 56. Monday we may have a timid start. On one side US U stocks had a big fall, other side some euphoria that June tax transactions are out of way, so may not be a big drop for us, but lets see.
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Here is the Figures for the Week:
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(20min delay)