Weekly Review U Stocks - 6th Sep 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 this week again looking for covers. Finished at 5408, last week 5648, losing over 4% for the week. So the new all time high which was looking very achievable for last 2 weeks, is again sitting in the back burner. Strong recession fears with a big sell off of general markets on Friday, SP 500 losing around 1.75% just that day.
- Volatility Index VIX is at 22.38, last week at 15, so up nearly 50% from last week. More crucially, is now over 20. Signs of caution now.
- Sentiment Indicator after a very very long time had reached Greed last week at 63. Unfortunately, didn't last even a week. Currently sitting at 39, Fear. Bypassed the whole neutral zone in couple of days. Not good signs.
- Bitcoin is again throwing a tantrum. After holding 59/60 level for quite sometime, and looking like consolidating, is now again looking weak, maybe wanting to test 50k again, currently sitting at 54. Another indicator asking to be cautious.
- Poor Russell 2000, every time some hope builds, gets hammered back to the pavilion. The weakest index, getting weaker. Finished the week at 2091, last week 2217, losing close to 6% in a week, around 2% on Friday. Not a good look for us.
- Yields which were rising last week, coming down strongly this week, last week at 3.91, this week, 3.71. All indicators of a rate cut happening soon.
- Dollar Index too going like Yields, down
- Gold, Silver, Oil - all going down, Gold at 2487, lost 2500 level, Silver a slightly bigger drop to 27.92, lost 28, Oil a very big drop to 67.67, below 68 now
- So overall markets which was looking very strong last week, now some question marks being raised - last week I wrote - "very positive". This week - "caution, wait and then play"
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What may happen next week - General Markets/U/Li/REE:
- SP 500 into crucial week now. When it was dropping last time in early August, it limited the damage to around 10% and returned back from 5100 level. Another test coming up. Currently down 5% from its high. Will it reverse from here, or go down 10%, or the dreaded 20%. Another couple of weeks before Interest Rate decision, so lot of drama and volatility could be expected till then. Next week CPI/PPI reading as well in the mix
- Russell 2000 is has again failed us. Not good for small caps. Not good for commodities, resources, risk-on stocks - tough times ahead. If it does not do better, it will be reflected in our Li/U/REE/Nickel/Copper/Iron Ore/Graphite etc stock prices
- Main data next week is CPI on Wednesday, PPI Thursday - they are market movers, so something to watch
- Uranium Sector overview - I have been writing for couple of months, May end top, July end bottom, September end top. CCJ to reverse from here. Till July it went to plan. I was writing that 39/40 is critical level, and a move in either direction may provide medium term direction. 2 weeks back it was looking positive and finished at 42.61. Last week there was a scare and tested the first lower level of 39/40. It came to 40.22 and finished the week at 40.84. This week it lost 39/40, so one major critical level lost. I have also been writing that the final number to hold is 35. If it loses that, I believe, based on trading pattern I follow (which could be wrong), that U sector will stagnate or meander/drift down and we may have to wait a long time before new highs are made. On Friday it came to 35.89, finishing at 36.96. So theoretically it has held 35 for now. Next week is crucial. Lot of recession fears are spooking the markets. If general markets fall big, U sector cannot be immune to it. Spot price at 79.85, just below psychological 80. So my theory of End of Sep/Oct beginning for reaching towards high, theoretically is still there, but odds have decreased. Either it may not happen, or may take longer. Lets see what happens next week.
- Lithium Sector overview - Another forgettable week, from a forgettable month, from 2 forgettable years. It is just not going away. Last week ALB had finished nearly 30% up from its lows, Ganfeng 7%. I had been writing that if the sector has to recover, this divergence cannot stay. There cannot be a party without Ganfeng, one of the market leaders. Either Ganfeng had to rise or ALB to drop to close the divergence. Unfortunately, ALB took the lead and decided to fall down to remove that divergence. ALB fell 15% this week. Although it did not make a new 52 week low this week, it seems to be getting closer. Ganfeng also fell 3.5% this week, now 3.5% above its low, ALB is 7% from its low - now the divergence is not much. But it was not we wanted. We wanted Ganfeng to go up, ALB stay there till catch up, and then they move up. Sadly that is for another day. This week a large number of ASX/US Li stocks made fresh 52 week lows, including the ETF of LIT. There were big losses by some big ASX Li stocks, LTR 21%, LRS 20%, MIN 24%, PLS 19%, SYA 15%, WC8 32%. All this drop is just in one week. US Li lost average 13% for the week. I feel extreme caution is required for any new entry to the sector, but its individual risk/reward, things can and may turn one day.
- REE Sector overview - REE stocks having a similar play like Li sector. 2 weeks back we got a green week after 5 weeks of red. Now back to back red weeks, this week average drop 3% across 30 stocks. Double digit losses for WA1/MEI/ENR with BRE and LYC closing in red behind. So not a good look. Last week I had written, things were looking better especially with WA1/BRE/LYC, we wanted MEI/ENR to come back and join the party, instead everything going south now. So again for this sector too, caution for any new entry
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Personally:
This week for me similar to last 4 weeks. Till last week I had bought 90% of my U stocks. I am still at 90%, sold and bought some, rotated a few. Things are not looking great, but we still have a big level to play. If that level is not looking like holding, I may slowly start getting out. I bought one Li stock on Friday, WC8 at 19.5, but may have to let it go on Monday it seems. Had bought WA1/BRE recently, but have let them go this week. U stocks I am playing (LOT/AGE/CXU/EL8/BMN/BOE/DYL/PDN/SLX/AEE). I like to spread, in case one or two doesn't work. Its individual choice, sometimes one stock may give biggest rise. I try to reduce risk of specific stocks not doing well. Besides Uranium, I am playing very cautiously, not playing Li/REE sector blindly at this stage. Just a few stocks here and there. Other plays in health stocks, with some splattering across Gold and Oil/gas - most of these I play standard spreading the money, so don't usually write there, but currently I have got around 10 stocks in these sector I am playing there. Main health stocks - DXB (avg 26)/BOT (avg 17)/PYC (avg 7.5), Gold - PNR (avg 5.2) - , I have been writing about them for several months now, keep trading small portions and reducing average
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.Stock/Sector specific Info:
- This week AGE played nearly same as last week - in the 3.8/4.6 zone. Made 4.2 high this instead of 4.4 last week, and touched 3.7 low this week instead of 3.8 last week - so overall slightly weaker, which is understandable how other U stocks have played.
- From a weekly perspective flat at 3.9. Which is not bad. Many other U stocks did or are close to their 52 week lows. PDN/BMN/BOE/DYL all lost close to 15% this week
- No ASX U stocks that I track did a 52 week high this week, again this week. We seem to be testing lower levels, and patience now
- U stocks down 38% for the year, so a lot of ground to cover back, drop of nearly 80% from January highs.
- This week average loss was 7% across 33 U stocks that I track. Previous week was 2% down before that 4%, so really in a strife now
- In May I had written I had exited most of my stocks at average 6.2. Last week I wrote I had have been buying for last few weeks, my average 3.55, No trades for me this week.
- U future is now at 79.95, last week at 79.25, slight gain for the week but still below the psychological number of 80. It needs to hold here, if there is any chance that we may reverse and do tops in next couple of months. So I am watching that closely to make any decision. I will get out if it looks weak, and if CCJ trading supports that theory.
- On Friday US U were in decent red, following the general markets which were in big red. Monday may be a timid/weak start to the week, time to brace up.
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Although U macro looks great, there are few flaws. One of the reason its so volatile. We go to euphoria and then go into doom every few months. There are 3 main reasons for that. I am still positive long term. But just trying to give context why I write tops/bottoms etc.
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First and most important is that the Supply/Demand figures for Uranium is black box. No one knows for sure what's happening. Very little trading happens on Spot market, most long-term contracts. In many cases figures are not know. So people make guesses rather than relying on numbers. Depending on one's inclination, we get different pictures. Lot of characters on X/You Tube etc. If you believe them, Spot price should have been 200, if not 300. All U stocks doing new 52 week highs every week. Not 52 week lows. But that doesn't stop them repeating the same thing. Most don't get it right. 6 years back in 2018 I read an article from a repute journal. It said, Uranium Supply crunch is coming soon. Its so dire, that it is round the corner. 6 years have passed, we are still looking for that near corner. No doubt, Spot 80 is much better than 20, or say 40/50, so big stride has been made. But not reflected in stock prices at number of times.
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Secondly, U sector is small. Very small compared to even other resources, and very tiny compared to big tech stocks. It can easily get manipulated by some big players. We don't want to believe, but trading patterns, the highs and the lows, is reflective of that. We can't change. We have to accept it. I accepted it long. Hence in my writing I write about making tops, making bottoms. Not saying we will keep going up, like other celebrities. It may be happening, we don't know, but manipulations can happen.
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Thirdly, we cannot be immune to what is happening to other resources. Although general markets have been rising, its mostly fuelled by big tech stocks. Most other risk-on stocks, resource sector, like Li/REE/Graphite/Nickel/Iron Ore/Copper all are in big trouble. Russell 2000 representing small caps and risk-on assets one of indices doing very bad. So overall macro is affecting us in some way.
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Hopefully other things improve, or we carve our own path.
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Here is the Figures for the Week:
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(20min delay)