Weekly Review REE Stocks - 2nd Aug 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
- Finally the correction of 10/20% which many analysts were calling for months, looks like it may be on its way. Previous week too it was looking close, but that Friday week a bounce had averted it. Not this week. There is always a reason, jobs/recession, etc. But from technical perspective, since rising from 3500 to 5600, nearly 60% price, it was more or less on a straight line. It looked unsustainable just on technicals. So for many, this was coming. Its always not a pleasant state to be in though. Especially remembering June 2022 and later. Last week SP 500 closed on 5459, this week, 5346, a drop just over 2%. The high has been 5669, so now a drop of around 6% from the top. It did reach 5302, closer towards 7% drop from top, so getting there towards 10/20% drop.
- Volatility Index VIX is at 23.39, over 40% rise in a week. So lost the bull territory. In fact, intra-day it reached close to 30 - getting towards strong bear indication. So very concerning now.
- Bitcoin too now indicating some tough times. From 54k drop it had reached 68k last week, but this week at 61k, so not happy state here as well.
- Sentiment Indicator - on 27 Fear, just above 25 otherwise Extreme Fear. Last year this time we were on 77, Extreme Greed. so things are looking going south for now.
- Russell 2000 was doing better in last few weeks than other indices, indicating good time for commodities, risk-on assets. Looked like rotation happening to small caps. All that was lost this week in just couple of days. Its back in it old territory of extreme weakness now, a play for last couple of years, and stuck with weakest index tag for some more time. Dropped from 2260 to 2109, a drop of nearly 7%. So back to our shells for now.
- Yields have dropped big this week on back of good economic numbers, large drop to 3.8 now. Very high chance of rate cut happening soon.
- Dollar Index has also dropped big this week, another indication of rate cut
- Gold, Silver slightly up, but nothing major. Oil on a moderate decline.
- So overall markets looking like going into consolidation/correction
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What may happen next week - General Markets/U/Li/REE:
- SP 500 is at crucial test this week. Last week I had written we need caution still, personally wouldn't be surprised if it drops, played out that way, wrote this - "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. Friday play may indicate that it may go higher towards 6000 first before going back to 5000, but I am not convinced, yet. Its a bit shaky, personally I wouldn't be surprised if it drops. So caution". So now, will it go to 10/20% drop, or is the 6/7% for now? Odds still favour a drop, at least till close to 5000 towards 10%, and then we may have to see. But best not to assume anything, follow the price rather than predict. Extreme caution now required. I have a feeling a play around 5000 may come, but whether that holds, I am not sure.
- All these days we were talking about rate cut. Markets rose getting close to it. A big twist has come now. Those pushing down believe Recession is the big play now. So change in narrative. Lets see if this narrative continues this week.
- Russell 2000 was a big disappointment this week. Its not looking good. All the positivity which was building for last few weeks seems to have evaporated in couple of days. Lets hope it turns.
- Uranium Sector overview - I have been writing for couple of months, May top, July end bottom, September end top. CCJ to reverse from here. But another number I have been writing for months and repeated last week as well was 39/40. This is what I wrote last week - "Very important next week, if it holds, July bottom theory may have played out. Next top in mid to end September, reaching around 65. But if it doesn't hold, 39/40 for CCJ is in play. I feel it can happen, but I also feel that may happen most likely if general markets too go in correction - SP 500 dropping 10/20%. But if general markets behave, odds of this bottom is not bad. As I always say, best to follow price action and not assume anything". CCJ 52 week low of 32.89 was made on 8th Aug 2023. Will we make another low next week and history may repeat itself. exactly 1 year later? Possible, but I still believe that general markets may need to reverse from under 10% drop for that, so SP 500 maintaining 5000+ level. But if its more, than we have very uncertain state. Uranium macro is still good, but panic creates fear, which can lead to big drops, so extreme caution required now for new entries. So those long term bullish may look like buying the dips. I might wait to see a reversal first.
- Lithium Sector overview - I am writing same as for several weeks now, no change, sadly for Li holders. Over a month 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. This week it got worse. ALB that I track to get sentiment, dropped very big, went to 82, before recovering around 87. But still a massive drop. I think it is reaching a stage of complete capitulation. No one knows where the bottom. Ganfeng too did a new 52 week low this week. For last couple of years, every week people feel it has dropped a lot, may be its bottom. But then it falls again. And again. So we don't know where the bottom lies. Money is getting out of sector. Li macro is very poor. On top of that, general markets may go into consolidation/correction, that will worsen the current situation. All I would think for now is extreme caution for new entry, unless someone has a very long term play and may stagger the buy dip.
- REE Sector overview - I feel same as last week. REE stocks overall have done better than Li stocks. But last 1 month, big signs 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 getting very serious now. Few stocks had done very well - WA1/BRE/ENR/MEI etc. All faltering now. Signs are not good, especially now that general markets are also looking into going into consolidation/correction mode. So I feel extreme caution now required for new entry. For last 4 weeks, across 30 REE stocks I track, we were in red for consecutive 4 weeks, so not a good look.
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Personally:
Same as last week, no change in what I am writing - I have been waiting for all the 3 sectors Uranium/Lithium/REE to turn around. Playing very cautiously, not playing general sector at this stage. Just a few stocks here and there. For U stocks waiting to see what happens this week. For Lithium/REE I don't think in short-term sentiment may change, so may wait. 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 succumbed to general play happening in markets and sector - a drop from 61 to 53 this week. Last week was about consolidation. This week it was about holding the levels.
- As I wrote in sector review, REE stocks facing the same play as happening in Li sector. Last 4 weeks it is catching up. ENR too losing some gloss, though its far ahead from 30s play it was doing for over a year. It made a 92 high, currently at 53. If it falls, first number to hold would be 46, a 50% drop from high. If it can hold that, the bullish play for ENR may continue. But if it doesn't and slips to 30s, it may be a long haul back. Lets hope it retrates from here, maybe from 51 itself, the first test.
- No ASX REE stocks did a 52 week high this week, again this week. We are clearly in correction zone now. Overall some big flyers and leaders of the sector are not doing well, so a lot of caution now required before doing new plays. Its individual risk/reward.
- REE stocks down 23% for the year, so it was looking very bright few weeks back, its reached a very concerning stage now
- Personally I exited my stocks last week, as I wrote earlier. 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. I still feel we need more confirmation before it becomes a buy. Any news though, could make a difference.
- General markets in consolidation/correction, so that may not help the cause. I would apply caution now for any new play unless there is news.
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Here is the Figures for the Week:
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(20min delay)