AZL General Discussion, page-19346

Another test of support?

Yes, AZL lost 4 pips to finish on 4.6c. Volume was comparatively low, just over 46 m shares traded. Opened on 5, high of 5, low 4.6 and closed on day's low at 4.6. Charts may not look good..

So we are back to testing the support. A very weak Li sector day today which did not help us as well. We had a comparatively strong day yesterday, so expectation was that the momentum will carry. But when after opening it was not able to overcome 5, there was a good chance it may ease a bit, and it played out that way. Last 3 days we have been testing this support of mid 4s, a play around 4.6/4.7 in last 3 days, so a real test. Usually shouldn't have had to come third time, but the sector didn't help today.

So where are we? I think another indecisive state. Today not able to get above 5 and come down towards 4.6 showed some weakness. Last Tuesday also we finished at 4.6 with a high of 5, but last Tuesday we gained 4 pips from 4.2 to 4.6 - so was strength. Today just the opposite - lost 4 pips from 5 to 4.6 - hence calling it some weakness. But we have had very big rise in recent times so maybe needs to do some back test, some consolidation, let all moving averages catch up and then make a move - which maybe more healthy and sustainable. Yesterday a good announcement helped us. Not sure what else may happen before PFS in few weeks, a surprise around something positive will help.

So it looked like a bit of let down, so anything positive?

• Still testing the strong support around mid 4s - has held for now
• 4.6 is still a very good finish, only few times we have finished higher than this in last 6 months
• Oppies (AZLO) made a new high of 1.4
• The whole Li sector was in some turmoil today, so our down could also be representative of general Li sentiment, rather something particular to us
• 
  

Personally, I let go a fair few of both my heads and oppies today. There were two main reasons. Firstly, tomorrow is Thursday. We have not had a green Thursday for nearly 2 months. Last 5 Thursdays is all red abd I have been writing about Thursdays for sometime. It could just be a coincidence, but as I have said previously many times, I like trading patterns and follow them. So even though there is no scientific reason for another red Thursday tomorrow, by habit I try to follow trading patterns. Second reason was Volume. Today we had the lowest volume since we moved to 2s and started playing there. Since then, most of the days we have done over 100m shares, today we couldn't do even 50m. When volume drops, I don't get a sense of what's going to happen - so try to play a bit defensive till the uptrend comes back, again did this as a habit and do with all stocks I play.

So what may happen tomorrow? Another indecision state. The whole Li sector is also in some big confusion and general weakness. Lot of big stocks looking weak. US Li stocks also not doing well. At this stage there is good chance we could hold the mid 4s, but its just probability, anything can happen, so please dyor and check the risk/reward. A hold of mid 4s and getting back towards 5 will be very positive, both from trend and trading pattern perspective. Will that happen? Lets hope so. All the best.