AZL General Discussion, page-19949

Three Great Announcements, but still down for the week?

(Sorry for the long post, a lot of punters have complained about my long post, so if you don't like, please ignore the post. I had few things in mind so thought will pen it down)

Yes, AZL lost 1 pip to finish at 3.9c. Our volume was on the lower side, similar to last 2 days, just over 21m shares traded. So not much of a day based on price action.

So we got 3 market sensitive and quite positive announcements - yes 3 days in a row, but our Share Price is down from 4.2 to 3.9? How did that happen? Why are we not able to move? What it may tell for future?
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So what may be happening to AZL, not able to breach mid 4s? Markets are not good. Punters may want more confirmation. Some much bigger news may be required.
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So what may be happening? Markets at this stage are quite terrible, for any risk taking assets. Lithium Sector is in strife. Real strife. The sector was already going down from the beginning of the year, but just over 3 months back, a big slide started happening in Li price and most Li stocks. And this has not stopped. There have been glimpses of hope, but none have been sustained. Every level it was coming down seemed a bottom, but it has continued to make lower levels. The last glimmer of hope was last Thursday/Friday - many thinking we may have bottomed. But in the Weekly Report I had written how ALB after making big gains on Friday had given up 65% of it's day gain and finishing towards the low. To me it looked like a bull trap. And unfortunately it turned out that way.

On the weekend I had a long thought around the Lithium Sector. After much deliberation, I decided to get out of Lithium sector - for now. I am a small retail player, who can have no influence on anything. Best I can follow. Many times I have written that doing market caps based on fundamentals is not easy - giving example of LTR which gained few billions in a day, and then later on lost few billions in a day. Nothing changed on fundamental. An offer was made. An offer withdrawn. So markets ae not able to get few billions right, how will it get 100 of millions right? As I have written multiple times, for me the key is price action and trend. I follow fundamentals but ignore it if price action is not good.
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Lets look at some fairly advanced Lithium Stocks. Both SYA/CXO have lost over 85% of their value from their highs. They are producing. Their market caps just over $500m. Next some advanced Li stocks. WR1 came out of 60m MRE yesterday. In old times its price may have doubled. It lost around 20%. Its Market Cap is now $150m, price has dropped from $2.52 previous high to 85c. Another GLN, quite advanced, may produce in 2025. Its price has fallen from $2.65 to 47c - Market Cap now $165m. Next AGY, another advanced. Drop from 80.5c to 12.5c. Market cap - $175m. Lets look at our stock AZL. When today we reached around 4.3, our Market Cap was inching towards $150m. Just over 3 weeks back we reached 5.8, our market cap was reaching $200m. Last few days all these stocks WR1/GLN/AGY made their 52 week lows and trading much lower.
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So I decided to get out of all Li including AZL and wait for market/Li sector to turn. AZL is still one of the most hopeful and exciting stock I feel in this sector. PFS to come out in couple of weeks. Many talking of delays, but I feel, it should come out as Paul has been repeating it even now. How will that be? I think it will be decent (I did an analysis just over a week back for those interested). Paul is very confident. The question is - how will the market react? We are in a crazy time where no news is good news. Not one Li stock is doing well - yes, not a single one. And I track 96 ASX Li stocks. So I am not sure at this stage. Retail I think will be scared if the Li sector sentiment and price continues for another 2 weeks as it is now. If it changes in 2 weeks - that will be great for us. But some big players, if they like the PFS, they could take position, that will certainly give a big boost to SP. For me, I have taken a risk but it suits my risk/reward. If the news is good and accepted by market, I might lose the gap up etc - not sure how much percent. But if the news is good and market likes it, I will be the first one to jump in. I may lose initial jump, but our journey will be long, and chance of success would have increased considerably - so will feel comfortable then and suits my risk/reward. Its individual choice, I didn't want to be thinking day and night what may happen, so my decision could be wrong, so please dyor and check your risk/reward
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I know nobody likes it when people sell. But I have always talked about price action for me as important. After watching all shares mentioned above and noting that every day few stocks are making their 52 weeks low, I was not feeling comfortable in the sector. I could be completely wrong though or market could turn suddenly from tomorrow. then I will be back, may be losing slight. I hope people understand my perspective including my risk/reward situation. I wish all holders very well and hope we get a cracker of a PFS. I will be back then. Or a very good price action - because sometimes its indicative of big players joining in - so that will also work for me.
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So what may happen in the next couple of weeks? A lot depends on the Li sector - whether it bottoms here or reverses. AZL can have its announcement which can override that sentiment and define its own destiny. On no further news or big players joining, there is a chance the SP may hover around this level of 4 (+/- 10%). I again wish everyone well and will be watching every single trade for a signal to get back. All the best.