Weekly Review U Stocks - 5th Jul 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 there is no stopping, no pause like last week, 5567 from last week of 5460 - up 2% for the week. So the run continues and no signs yet of some correction which many analysts are waiting for months.
- Volatility Index VIX is at 12.48, continues to stay in strong bull territory and at similar level as last week
- Bitcoin looking shaky after strong run from 17k, first time looking like collapsing, at 56k now, but went to 54k - so in a very dangerous phase. Bitcoin has on many cases acted as a precursor to stock market trend - so it rose first, then Stock market followed, so many watching to get cues around general markets, if it goes below 50k, high chance Stock market could easily drop 10 to 20%
- Sentiment Indicator - on 54 Neutral. Better than Fear of last few weeks including 44 last week. 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. And I mean very bad. Worst performing index. No wonder commodities, risk-on assets, Lithium/REE etc struggling. This week it finished at 2026, lost 1%, when all other indices making new highs
- Yields were rising, but jobs and unemployment data on Friday made couple of percentage drop, still high though
- Dollar Index at similar level, in fact going up, another divergence
- Gold, Silver and Oil - was in holding pattern last few week, but trying to come back, especially last couple of days
- 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, but not happening till now. Maybe Bitcoin indicating, but its so strong that looks unlikely in very short term
- 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. Its going south - not good, we want it to come back, previous week when other indices were flat, then it did well, but this week when other indices are doing well, it went south - who knows the market correction will give it some impetus
- Key economic data this week around - Important week for number, CPI/PPI. But more importantly Powell speech before that. He can move markets.
- Uranium Sector overview - (My comments similar to last week) 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 49. 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, before end of July, 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 - (My comments similar to last week) 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 39%, only 7 of 90 stocks is in green for calendar year 2024. It is dire. Every week a lot of stocks make fresh 52 week lows. But this week was slightly better, because China stocks had a good rise one day, so for the week we were up 2%. So better, but only slightly better. We need very good days, for weeks before one can feel comfortable that it is coming 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 - (My comments similar to last week) REE stocks overall have done better than Li stocks. In last few weeks I feel it is the best performing sector. Usually my portfolio used to be Li/U and only a small REE. Currently REE is my highest holding. This week it rose 8% across 30 stocks. Last week 5%. So I feel if one wants to play across 3 sector and am thinking of short term play, I feel REE is the way to go for now. Just my view, could be wrong so please dyor. 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 was earlier due to June tax transactions, but now because 2 main sectors which I play often, are not in a good state. U stocks reached a peak end of May, I got out of most of my U stocks then. Its in correction zone, trying to find the bottom, may happen by end of July when I may get in. Li stocks have had no luck like U stocks, its still in doldrums, I have very small holding comparatively in these 2 sectors now. So mostly playing REE stocks, main ones WA1/ENR/BRE/ENV/MEI/RCR etc. 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 have started buying 3 other Health stocks, still not 100% sure hence not writing, but hopefully next week, Also few Oil/gas have started buying, again not sure hence not mentioning.
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Stock/Sector specific Info:
- This week AGE playing in 4.6/5.3 zone mostly, like last week. All the plays this week happened between 5 and 5.3. So in a holding pattern now, waiting for U macro to change
- From a weekly perspective moved from 5.3 to 5.2, 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 85.65, last week 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. BOE has dropped around 38% (612 to 382), many others like BMN/LOT/BOE/PDN/DYL doing 30 to 40% drop as I had written. Small and mid caps, like AGE/EL8/AEE and all small stocks, which never got full benefits of the rise, not doing well.
- On Friday US U were in slight red. Monday we may have a timid start.
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Here is the Figures for the Week:
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(20min delay)