Some thoughts on today’s price action -
1/ “Buy the rumour and sell the news” is a very well known trading strategy. In this case, since mining license was widely anticipated, that strategy seems to have played out.
2/ From long term angle, mining license is obviously a watershed moment – massive derisking event which can attract several new interested parties
3/ CATH is one of those parties whose agreement is one that is now going to proceed – clear sign of derisking event for them.
4/ Even including today’s fall, 1 year gain is PLS (122%), AKE (74%), LTR (285%), AVZ (406%), LKE (444%), CXO (341%), SYA (631%)
AVZ still a strong performer in the sector over longer time frame inspite of giving up some huge gains today
5/ 6 months PLS (+11%), AKE (+22%), LTR (-30%), AVZ (+51%), LKE (+50%), CXO (+91%), SYA (+78%)
It has been a mixed 6 months for the sector with several stocks making big gains and giving up some of them. AVZ still not too bad at all.
6/ 1 month PLS (-26%), AKE( -11%), LTR (-32%), AVZ (-35%), LKE (-26%), CXO (-17%), SYA (-14%)
Rally from mid March lows substantially or completely given up by many stocks in the sector. AVZ’s fall IMO should also take this sector performance which shows it clearly.
7/ 5 day PLS (-5%), AKE (-4%), LTR (-7%), AVZ (-22%), LKE (-18%), CXO (-12%), SYA (-21%)
AVZ performing poorly against bigger peers over 5 days but movement in line with sector when looking at smaller peers. Refer above points of longer term time frames and it then evens out a bit.
8/ Ganfeng and Tianqi have been falling much over last year compared to ASX lithium stocks. ASX stocks finally moving in line with sector. Possible larger degree Elliot wave 4th wave correction for entire sector has been in place since many months, with final huge 5th upwards for entire sector possibly pending.
AVZ has been outperforming most peers over multiple time frames over a year and today’s fall would bring it in line with sector.
9/ Taking entire rally from around 14 cents around May to all time high of 1.37, we get 50% Fibo retracement of around 76 cents and 61.8% retracement of around 61 cents. We are close to 50 Fibo today.
10/ AVZ touched around 73 cents in early December- so there is past support in the 70s, in case of further falls.
11/ AVZ is into oversold territory. RSI was 28%when I checked some time back
12/ Very good to see AVZ address ownership rumours in their announcement.
Seen some mega trolling / spamming on the bird of late.
Won’t be surprised to see some repeat offenders pushing spurious claims, facing some legal action from AVZ .
From announcement - “The Company is continuing to take all necessary actions to resist these vexatious and meritless claims and to protect Dathcom’s and its interests, and the Company will consider all options including engaging with the DRC Government andseeking international law remedies.”
13/ Plenty of evidence given by many today of fake orders. A shame really if an ASX 200 company and recently one of almost top 100 companies can be manipulated in this manner like a “casino penny stock” with 20% rise at start to finish with 20% down on the same day.
14/ Quite possible that several of the sells today were also stop losses being hit
15/ Keep in mind again that not just lithium sector but overall market is also weak. Hopefully sector as a whole recovers and AVZ can once again continue its upward move.
IMO, all shareholders in the sector should be happy for others’ gains and we all need a strong lithium sector which has over the last year eventually shown gains in our individual stocks.
So yeah, not a pretty day but massive derisking event from longer term.
Hopefully if lithium sector improves, we can continue to look forward to plenty of other upcoming news like CATH finalised, HEPP, SEZ, DRC hub, FID, financing, offtakes, etc.
Cheers
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