Weekly Review Li Stocks - 8th Jul 2022
Here is the weekly review figures and charts that I do every week. It is useful only for those interested in trading or those who hold multiple shares and based on performance would like to keep re-balancing as we go. I do hold a number of Li stocks and like to trade. This is the reason I include a number of Li Stocks in my analysis.
Please note:
This is no reflection of all AU Li stocks as I have only included those that I am interested. In my list are shares that I hold, held before or planning to buy in near future. Since this is my list, I may have missed some good stocks. The averages are simple averages and not weighted averages. So the average don't reflect AU Li average. This is just for my tracking and analysis. I have both ASX and US stocks in two separate figures.
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This week I have not added any new stocks to my list. So my list has 43 Lithium stocks.
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Please note that all my analysis are from a trading perspective looking at short-term view.
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This week there is no Diary. I am adjusting my portfolio due to two reasons - first and mainly around end of finance year and secondly volatility that is happening in the markets. So having a lot of changes in my portfolio - one planned (EOFY) and second unplanned (volatility). As this is specific to my situation, I thought I will hold on sharing that for now. Hopefully back soon.
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Since announcements have become important, I have included key announcements at the bottom of the post. Key ones are highlighted - Tuesday CPI estimate, Wednesday CPI numbers, Thursday - PPI numbers (all US, so impact for us will be next day)
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To buy and hold for long term now?
- Like last week, again I did a lot of reading this week, but again have not reached any conclusion
- Still lot of divergent views, but bears are still in majority
- There are millions of data and thousands of charts - same data/chart is interpreted differently if one is a bear/bull
- Bulls feel there is going to be a bounce - firstly around SP 500 (currently around 3900 mark) at 4000 mark, may be 4200. Bulls are still not sure if that will be reversal though
- Bears are firmly of the opinion that this is going down - maybe not immediately, but in next few weeks/months. The SP numbers crucial to them are - 3500 first, and if it breaches then 3200. For them, if it reaches 3200 and comes back, they would feel happy and contented that a reverse can now happen
- There is a high chance US is already in recession. Q1-2022 - contraction was -1.6%. For Q2-2022 - latest estimates are contraction of -2.1%. So with 2 quarters of negative growth, we are already in recession. So don't know why people are saying is to come. Maybe its not officially announced. When its announced, we may get a spike. Actually, when I first understood it, it was not good, then I thought if we are already in recession, then we are already bearing some of the pains now, so hopefully less in future.
- Volatility index is really giving mixed signals. Eg VIX - the volatility index is falling and now around 24.6. This is telling that punters are not panicking at all, and something in forward direction may happen. But MOVE - volatility index for bonds is panicking. Usually MOVE and VIX go together, but not now. Who is wrong? Analysts feel VIX may be wrong, because more money is in bond.
- Another figures much talked about is yield on 2 year and 10 year treasury bonds. The figures of now imply that it is inverted, and hence pointing towards recession. I was surprised not many are talking about that we already are in recession and it may be because of that.
- Lastly - the announcements have become very important. They can provide a lot of short-term (or may be even long-term) direction. So lot of volatility, anxiety around these announcements.
- Conclusion - Individual to decide what to do. One thing we all do not want to be in - when the reversal happens, we are not left holding cash (buying/topping up) as we were waiting for some other signals or looking for it to go more down. It will never be possible to predict exact bottom, so close enough should be good. For people to take some risk, if they feel we are within 10%, start buying in tranches (like 3 to 4 lots to average out). If one is risk averse, wait for better sentiment - chances are that one may miss the first 10-20% of rise, but less chance of losing.
- Personally - Last week was the first time I started buying and holding. I started with 20% of my funds on first day - but continued to buy when things felt a bit, and have now around 45% of my fund in market. Honestly, I am not very confident of a reversal. Its up by around average 7% from my buy price. My initial target was between 20 to 30%. I have a gut feeling that there may be a bounce, another 15-25% of bounce. Once more figures come this week around CPI, PPI and earnings - I will decide whether to sell these 45% (all or partially), hold or further increase my holdings.
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Something to keep in mind this week:
- Stocks are in constant decline after reaching new highs in April
- Second weekly gain of 6% this week, last week was 3% gain - all these after 5 weeks of decline
- Many stocks have lost 60-80% from their recent highs - big falls can be seen, lot of catching up to do
- For the year now, average gain of 4%. So back to yearly gain in positive territory after 2 weeks in red
- Markets are still volatile. Individual risk appetite and expectation should drive trading.
- There are some signs of decoupling from general market, but general market is still over powering everything
- Few weeks back I had shown that US Li stocks had lost 13% where as ASX Li stocks 43%. So I was hopeful that ASX Li stocks will make big gains. Last week US Li stocks dropped 8% where as ASX Li stocks gained 3%. This week ASX gained 6% whereas US 3%. So we are getting towards parity now. But not the way I wanted - I was hoping ASX rise not US falls. Anyway, margin is now decreasing between ASX and US Li stocks, as I expected
- Prediction - Stocks will start sideways this week (slight gain or decline - but more chances of slight decline) The general markets will provide direction. Hopefully by end of week we are ahead of last week - (This is the same I wrote for last 2 week and somehow it has been correct)
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Something Positive:
- We have declined significantly, probability is that even if we fall from here, it should not be much. So risk/reward is getting skewed towards buyers
- After long time 2 weekly gains - moving in right direction
- ASX is catching up with US Li stocks - so more gains for ASX Li stocks hopefully
- Once the plateau happens, once the price gets above 200 day moving average, many punters will get in. This may still be few week or months away, but those optimistic - for sp to move above 200 dma, sp decline should reduce from here and slowly catch up towards the line. But please dyor
- US indices had good gains last week, unless there are bad announcements, we may continue on our forward journey
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Here is the Figures for the Week:
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Figures for US Li stocks:
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Announcements this week -
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(20min delay)
