Weekly Review REE Stocks - 19th Jul 2024
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 REE stocks and like to trade. This is the reason I include a number of REE Stocks in my analysis. I also have history of 2023 for those interested in longer term view.
Please note:
This is no reflection of all AU REE 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 REE average. This is just for my tracking and analysis.
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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 no new additions, so my list contains 30 REE related stocks.
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How are we going in 2024 - General Market
- SP 500 first real test coming, not for weeks, but for months it was rising in a straight line, now after long time 3 red days. From a weekly perspective moved from 5615 to 5505, so lost just over 2%, which is not big in scheme of things. Question is whether this is correction 10/20% drop, or pullback 2/5% - so something to watch
- Volatility Index VIX is at 16.52, first big sign that markets may go into correction, even in slight pullback last few months it was able to keep its head below 15, but now real test
- Bitcoin has done an about turn. Moved from 72k to 54k, looking like tanking and signalling big drop in markets, well, it has now recovered to 66k - well, inference from here is markets will not collapse, there may be pullback, but nothing severe, but lets see if bitcoin indicator is a good one
- Sentiment Indicator - on 49 Neutral. Last several months it was at odds with market, saying market has to drop. Market has slightly dropped but not much. I feel current indicator is a good reflection
- Russell 2000 finally waking up from its slumber. A good rise in last 2 weeks, and first time in months if not years, outperforming other indices. A good sign for commodities, resource, risk assets, small caps. Lets see if it continues. It moved from 2148 to 2184 this week, made a gain of over 1.5% - so a good play when SP 500 dropped 2% in a week
- Yields have dropped last couple of weeks, so in right direction. Next major action could happen on rate cut.
- Dollar Index has also dropped, so in right direction for general markets
- Gold, Silver and Oil - all made a good rise, but last couple of days when SP 500 was having a fit, they joined the group, so slight weakness now
- So overall markets still doing well, commodities, resources, risk-on-assets trying to make a comeback
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What may happen next week - General Markets/U/Li/REE:
- SP 500 is in consolidation/correction territory. It has risen from 3500 to 5600 without much obstacles. Many thought it will scale 6000. But many others are waiting for months, since it went past 5000 to see a correction. Is this the time? We don't know. But if we have to have a correction, current time looks very likely on probability. So time for caution.
- Russell 2000 needs to continue doing what it is doing for last 2 weeks. I feel only if it reaches close to 2500 will there be some indication that it has also joined the party of SP 500, of Magnificent 7, of tech stocks. Still a way to go, but that's the minimum.
- Key economic data this week around - Not much date this week, PCE on Friday. So technical and sentiments may drive the market.
- Uranium Sector overview - I made a call several weeks back that CCJ will make new highs between 55 to 60 in this phase of rally. It reached 56.24 on 31st May. Two weeks before end of May, I wrote there is a very good probability we will do tops in next 2 weeks. Somehow it played out that way. I wrote that after this CCJ may go towards 45. On Friday it played in 45. So both the things have played out exactly, somehow. My third thought which I have been writing for couple of months is that we will bottom towards end of July. So we are reaching that point. Lets see if it plays out that way. If it plays out that, fourth thing I have been saying is the next top will come between mid to end September. But that is still away, lets see how July plays out. I had got out of all my U stocks in end of May. If it looks like playing my way, I may start adding U stocks soon. Lets see, there are big analysts out there very successful, don't know what their opinion is, so please dyor.
- Lithium Sector overview - Few weeks back I wrote that - "Lithium sector is in serious trouble". Nothing has changed. We are in more trouble. At this stage, one would think the sector is nearly dead. No new money will come here. Just in last 6 months, across ASX 90 Li stocks, we have lost 41%, only 67of 90 stocks is in green for calendar year 2024. It is dire. Every week a lot of stocks make fresh 52 week lows. This week again a lot of strife, a lot of stocks making new 52 week highs including ALB which I use as a measure. So overall, extreme caution to play this sector. Of course, if things turn round, it can turn quickly, those buying now would do very well. But more risk averse would think of waiting, seeing some signs of reversal before committing. Its individual risk/reward. My sentiment is to play with extreme caution, especially around new plays. But things can change quickly, so best not to make assumption but follow price action.
- REE Sector overview - REE stocks overall have done better than Li stocks. But last couple of weeks, first big sign that it is falling in line with the malaise happening in Li sector. So the bright spot which was there, I can feel its no longer bright. Its not yet turned dark though, so hope is still there, but something has changed in last couple of weeks where many big stocks are in decline - they were leading the sector - like WA1, BRE, ENR etc, but suddenly a question mark. It could still be normal pullbacks, and I hope it is, but I have my concern now. Hope I am wrong. Still overall its done better. But that better has been only to specific stocks, most stocks are still in red. Eg for 2024 calendar year, 22 out of 30 REE stocks that I track are in red. Its more a reflection of Russell 200, commodities, risk stocks etc. So lets hope it turns.
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Personally:
I have been shuffling around some stocks was earlier due to June tax transactions, but now because 2 main sectors which I play often, are not in a good state. U stocks reached a peak end of May, I got out of most of my U stocks then. Its in correction zone, trying to find the bottom, may happen by end of July when I may get in. I am eying it now to see if really end of July marks the bottom. Also depends on general markets, they shouldn't tank, like 10/20%, otherwise they will drag down even U stocks who are trying to playing cyclical game. Li stocks have had no luck like U stocks, its still in doldrums, I have very small holding comparatively in these 2 sectors now. I am waiting for a turn, no signs this week. So mostly playing health stocks, with some splattering across Gold and Oil/gas - most of these I play standard spreading the money, so don't usually write there, but currently I have got around 10 stocks in these sector I am playing there.
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Stock/Sector specific Info:
- This week ENR had a big drop - from 87 to 61.5. So the euphoria that was building has a slight dent, but still above a play in 20s /30s from a month back
- No ASX REE stocks did a 52 week high this week, again this week. We are clearly in correction zone now
- REE stocks down 8% for the year, so it was looking very bright few weeks back, some shadows now
- Personally I exited my stocks this week. My buy average was 30.5 as I had written. On news I read the responses. I am not very great on fundamentals. I got a feel by reading the posts that its not great. I play on technicals, trading patterns more, so I exited in early 80s. I am watching now from trading perspective. At this stage its still looking vulnerable - making a push, but not able to hold, and then coming back to a lower level. One of the reasons I have not yet bought back. I am waiting for a trend change. Currently its down. General markets- may, and I mean may, also go into consolidation/correction, so that may not help the cause. But any news could. So something great could still in short term.
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Here is the Figures for the Week:
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(20min delay)