So are we out of the supply level?This is what I wrote couple of...

So are we out of the supply level?

This is what I wrote couple of days back. Today was the 4th day, I was hoping/expecting the move will come in 3 to 4 days. It actually played out that way on the 4th day.

When can we come out of this level? Based on my understanding of pattern, 3 to 4 days of trading. We have done 2 days now. So I feel in the next day or 2, we could see a move. Which side will it be - of course it will depend on whether there are more buyers or sellers - so we will have to wait, rather than predict and think one way. I always like to keep an open mind and try to follow price action.. Upside we need to move above 4 and towards mid-4s to be reasonably confident that we have managed to do our back test successfully. On weakness, 3.2 can come into play.

This is also a repeat from 2 days back, why the level of 3.5 was important or critical.

So why is this level important? We are in a very critical zone. The number 3.5/3.6 is important, just based on my interpretation and I could be wrong. When we were rising from 2s we came to 3.5, got stalled here. Then we retreated back to 2.7 before taking it out. Same when we were coming down after touching 5, we reached 3.5, held it and then made a new high of 5.8. So I feel both with respect to support and resistance, its a key zone.
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So how was today? Excellent, both on price action and volume. We gained 20%, got over 4 - my first level. Volume over 50m, highest volume in 2 weeks. So nothing much not to like. Reason why we gained today? We will never know, but I feel some technicals may be involved. We didn't go down because of any news. Hence I felt a move could happen after 3 to 4 days at this level. Who knows - someone may be in the know?

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Personally - I am playing with two holdings.

One I am not trading and will wait for news or some abnormal price action. Second lot I trade.

When we were rising and around 5/5+, at one stage AZL was more than 50% of my portfolio. I was not feeling comfortable from risk perspective, hence I had let go some, also because of price action. So the lot I trade, I did trade it out today, both heads and oppies. Still AZL is currently my biggest single stock in portfolio, so still hold a lot.

So why did I trade out today? Mainly from risk perspective. I am ready to put in much more, but I feel I need more confirmation - some news or a very strong price action. As I have said many times, I don't mind buying higher if the trend is right. Also my current holding will be gaining.

So what am I worried about? Two things. Firstly, we need to have positive news. We need market to support us. We need the sector to support us (last 12 months has been very bad). So I will wait for more confirmation to take more risk. Secondly, outside chance of a CR. When it came down to 3.5 level and stayed there, last few days I must have read all quarterlies/presentations at least 5 times. Sometimes the price is brought down to have CR at lower level - it may not be here, but I have seen elsewhere, so checking it. Based on quarterlies, I feel there is at least 20% chance of CR. Based on last quarterly, company says it has nearly 5 quarters of funding available. I don't think that's right. Last quarter we got nearly $1.4m grant which reduced our spend. I don't think we are getting it this quarter - though I don't know, so taking a guess. Last 2 quarters our exploration/admin/staff/plant cost etc is $4m per quarter. Is there a chance we may have spent more this quarter around commissioning of pilot plant, or was that already covered previously - so again an unknown for me. So I am thinking minimum looks like $4m, but could be higher. We had $10m end of September. Logic says that we should get PFS out, get SP higher, and then do a raise after few months. But today also another Uranium stock (EL8) I am playing, the boss said we have 7m, so enough for a long long time, just days/weeks back, and suddenly CR for 10m. Same with another U stock AGE couple of months back. So I know it happens.

Based on these two points I have decided, I will keep my long holding and not trade that. Rest I will only do short-term trades till I get more confirmation. I hope some understand from my perspective, my risk management - many times when I write I have done some trading (some sell), I have had to cop a lot - but I know that is part and parcel of HC, so have learnt to manage that. I usually or mostly, try to write when I buy, when I sell - its my habit, somehow I like to be transparent.

All these analysis is just my thinking/opinion, I could be completely wrong, so please dyor and check risk/reward.

So what may happen next week? Any news will take over the price action, till then technicals/big buyers. A very good move today bodes very well for next week. Next 2 levels are 4.6 and 5. Achieving one will be good, both will be very good. If we weaken, I am hoping our 3.8 acts as first strong support failing which we have massive support at 3.5. But Lithium sector is looking like making a turn, big gains today across a number of Li stocks, so if that continues, the probability of going up is higher than going down. . Will that happen? Lets hope so. Enjoy your weekend on a good note and all the best.