Can PEN meets its deadlines?.From a weekly perspective, PEN...

Can PEN meets its deadlines?

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From a weekly perspective, PEN moved from 110.5 to 118, may look good on paper, but was not convincing.
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So what is happening in PEN? Overall weak. Looking very vulnerable now, from a trading pattern, stock price perspective.

Like last few weeks, there are three major factors in play

• U macros - This was looking very strong in US, very weak in ASX - this week, US is retreating/consolidating
• ASX U play - ASX U stocks have now clearly diverged from major plays of US - CCJ/UEC etc - they are doing 52 week highs, ASX U stocks trying to do 52 week lows - or close to it
• PEN Play - Playing weak. At this stage ASX U macro is so strong, that only some bad news affects the stocks

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PEN is just following the U macro, not the US U macro, but the ASX U macro, which is very weak. Last few months, I have shown a lot of data which shows that ASX U stocks are doing miserable compared to US U stocks. Not much changed this week. We wait. Now it is doing a small swing - good day wants to reach 120, bad day 105. But this is only a small play. It has come from 260, was playing over 200 most of the time, so this small play is no good. Also looking vulnerable - any good news, it may have a some gain, not sure it will be big, but any bad news, could be punished again. Odds are not good to hold the stock for now - wait for confirmation is a better play, I feel.
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Last week I mentioned that ASX punters are playing very weak across a lot of risk on stocks. And this play is just not Uranium or Lithium. There are 2 pressures. One, globally, risk-on sectors, spec play is weakest in last several years. More or less dead. Secondly, ASX punters are not even playing like their overseas counterparts, playing more weak. A combination of these two has made it deadly, sentiment rank poor, any positivity is based on miracles rather than numbers or trading patterns. Only thing on our side - this is going on for some time, law of probability and history suggests that things will turn one day. We may be getting closer to that day/period. Lets hope.

ASX U stocks which were lagging big time US U stocks, had to make gains and bridge the divergence. Instead, as US U stocks are sliding slowly down, ASX U stocks are also moistly drifting, many trying to hold the current levels. But still weakness across the board.

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Personally, writing same as last week - I had exited most of my ASX U stocks, especially after seeing such a strong divergence. The message was clear, not to play ASX U stocks, until it changes. We can have a complete U boom, and it could just bypass ASX U stocks - its looking real now. Now 4 months of this divergence has happened. How many months of more data do we need to be sure?
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So what may happen next week? CCJ is retreating. As always there can be 2 plays - a 10% drop or a 20% drop - from its highs. Its close to 10% now. Last time when it came from 56, it dropped only 10% and not 20% - it helped to make a new high at 62. If CCJ holds here, then its fine. But if it drops and reaches around 50, it may drag down the sector and ASX U stocks with it. We are already much down compared to CCJ/UEC etc. We have to recover more, rather than fall. We cannot afford to go down more from here. We need a rally, a big one to bridge the gap. Maybe a Santa rally. Will that happen? Lets hope so. Enjoy your weekend and all the best