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From a weekly perspective, a slight drop from 2.8 to 2.6. Volume low to moderate from RDN perspective, a bit on lower.
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So what is happening? I feel we are playing the Li macro. No strong direction. Macro drifting downwards, and I felt RDN just followed that. From a numbers perspective, many may want not to lose 2.5 even on weakness, otherwise Feb low of 2.1 may come into play. To get out of this weakness, I feel a play in 3s need to happen. Any news around drilling could help the cause, but the Li macro is so overpowering currently, that lot of good news is not sticking with stocks, so lets see.
Li macro is not in a good state. ALB that I use as a measure is within few percent of its 52 week lows, at 93, low at 90. And that is a slide from 130s just some weeks back, which if reaches there is a 50% gain. That 130 range itself was not a good state. Current state is alarming. There is nothing positive going on in the sector at this stage. A very trying situation for most holders. General markets made new 52 weeks high for several weeks in last few months, rising nearly 50%, but Li sector did not get any benefit out of it. It now seems the general markets are looking like making some consolidation/correction, don't know what will happen to Li sector, if that happens. So it is all gloomy at this stage. But as they its darkest at dawn. Some day it may change. And when it will happen, it could very volatile. And very sharp. So its individual risk/reward at this stage, should I continue to hold, or buy, or get out and wait for confirmation of reversal and then buy back. There are no easy answers. Each of us have to decide what to do, what is our time-frame, expectation, and capacity to see further down before it returns. Lets hope we are getting closer. I still feel we may bottom in the next couple of weeks and could see some decent positive movement by September. This also based on previous patterns. But its my thoughts, I could be wrong, so please dyor. So lets see.
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Personally I had written few weeks back that I had bought at 3 and will hold as long as 3 looks like holding. I exited at break even. Now I am looking for a trend reversal. If it gets to 3, I will buy. Otherwise I will watch, including macro to decide.
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So what may happen next week? I am not expecting any fireworks unless we get a defining announcement. Otherwise we may play macro. I still feel if we can hold this level for all the down which is happening in the sector, we would be well placed to reap the rewards when it does turn. Will that happen? Lets hope so. Enjoy your weekend and all the best.
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