ENR Weekly Report, page-90

Weekly Review REE Stocks - 15th Nov 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.
.

.
Please note that all my analysis are from a trading perspective looking at short-term view.
.

This week no new additions, so my list contains 30 REE related stocks.
.
.

How are we going in 2024 - General Market

• SP 500 is back now in consolidation mode after make new all time highs last week and scaled 6000. Nothing unusual till now, although there was a big drop yesterday. Up to 5% drop from its high is normal in these conditions I feel, sometimes even 10%. The 5% drop mark is around 5700, currently sitting at 5870, a drop of 2% from last week 5995. So still in bullish phase as of now. Short-term could see some more consolidation though
• Volatility Index VIX is at 16.14, last week at 14.94, so increased but still in a strong bull territory under 20. Last night it increased 12% as markets fell. l
• Sentiment Indicator in Neutral at 51, last week Greed at 61. So it is also moving with markets, not sure who is the lead, usually Sentiment lags, and having a volatile swing, last 5 weeks - Extreme Greed/Greed/Neutral/Greed/Neutral
• Bitcoin is on a tear. Last week I wrote that after making new all time high above 73k, can 100k be the next target. I didn't think that would happen so soon. Bitcoin currently at 91k. Surely one would think that if there is no black swan event, Bitcoin will scale 100k in near future.
• Russell 2000 which last week had raised hopes for all commodities, risk sectors, now is back to its usual weakness. That has been the story with Russell for over 2 years. Not able to sustain. And it reflects in SP of resource sector, small caps etc. This week finished at 2303, last week at 2399, so lost 4% for the week, higher than other indices. Not good.
• Yields still going up after 2 rate cuts. Sitting at 4.42, last week at 4.3.
• Dollar Index too going up like Yields after Trump win, cooled down little bit now
• Gold down, Silver down, Oil down - Gold at 2567, last week at 2691, Silver at 30.33, last week at 31.42, Oil at 66.95, last week at 70.43,
• So general still looking great, caution has been thrown to the wind. But for those playing commodities/resource - U/Li/REE - not so great.
• .

.
What may happen next week - General Markets/U/Li/REE:

• SP 500 still in bullish mode, has reached its target of 6000, now in consolidation phase. Similar play in mid 5000.
• Russell 2000 still not doing well. We want to see this build up. Any fallback will not be good for small caps. Not good for commodities, resources, risk-on stocks - tough times ahead. If it does not do better, it will be reflected in our Li/U/REE/Nickel/Copper/Iron Ore/Graphite etc stock prices. Only if see big gains in this index, rotation signs will happen.
• Economic data next week - No major data this week, so mostly technicals may drive the market
• 
  
• Uranium Sector overview - CCJ in an indecisive state. Last week I wrote - consolidation mode. It played out that way this week. In consolidation. Around 4 weeks back made a new high of 58.72. Since then is playing with the lower level to see if it holds. First play of a drop of 10% has happened. As I have been writing, if it can't hold this level, a 20% drop towards 45 could happen. Till now it has held well, not given away 50 easily. From a weekly perspective, it was in green, gained around 2%.
• So if everything is looking fine, then is there anything to worry? ASX U stocks are in turmoil. PDN and PEN, one producing and second closest to producing, showing signs of trouble. Both lost over 25% this week alone. Both made new 52 week lows this week. Dragged down most ASX U stocks with the weak sentiment. Many U stocks are down around 70% from Jan. Many are at 52 week lows or within 10/15 % from its 52 week lows. On average stocks have lost 62% from their 52 week high. This week we lost 7% across 33 U stocks I track. So numbers don't look good, especially for ASX U stocks. US U stocks doing much better. Many are within 10/15% of their 52 week high. Why such a big discrepancy? Its unusual. Mostly thing have gone in tandem - slight differences are normal. But this is big. I don't know why. Maybe ASX punters are not comfortable with U stocks. We need to see now whether this is a blip or a more serious issue.
• 
  
• Many feel, PDN/PEN is an over-reaction. Its possible. But its not easy to ignore the market. Next in line are BOE/LOT. Both down around 55% from recent high. LOT from 49 to 21.5, BOE from 612 to 286. Not good numbers. We are supposed to be in an age where U macro is one of the strongest. But most ASX U stocks very weak. Something has to change. Either macro may become weaker or ASX U stocks have to rise. Lets hope its the latter. How can U macro become weak? Besides accident, the biggest thing I worry about is Supply/Demand. We all think there is a Supply Squeeze coming. In 2018 there was a big article that Uranium Supply Squeeze is round the corner. 6 years on, we haven't reached the corner. Complete data around Supply/Demand is not available. Its a black box. Most take a guess. And most do very optimistically. How much can Secondary Supply (old reactor, weapons, etc) continue to meet the market, outside of Primary (companies producing U) , we don't know. The positive thing, with time, even if we don't have data, chances are good the squeeze is coming closer. That may be the biggest incentive for U stocks to make gains, which also may be reflected in Spot/Long-term Price. But will it happen now, next 3 months, within a year, or after at least 2 years - we don't know. So it may become a long wait. But my experience says that sector is volatile, 100/200% gains, 50/75% drops happen. So hopefully seeing that level reached by ASX U stocks, one would think we are reaching bottom. But US U stocks are towards the high. So it has become complicated now. Lets hope it gets clearer in the next few weeks.

• 
  
• Lithium Sector overview - Last 5 weeks I have been talking about, Li stocks have done their Phase 1 increase. Most had made gains of 30 to 50% from their lows. Then there has been a pause in last 5 weeks. But mixed play happening across different continents and different Li stocks within the same zone. Its very peculiar and may confuse what is really happening.
• 
  
• Chinese Li stocks doing great. Ganfeng came close to its 52 week high. Its currently sitting well above 50% of its recent low. Tianqi too around 60% up from its recent lows. So all good there. And its consistent.
• 
  
• US Li stocks, very mixed. ALB is close to 60% above its recent lows. But not SQM which is within 20% of its low. SGML 52 week high is 34, currently sitting at 12. So mixed play. ALB is the stand out. So leaders do make first move, so hopefully it will catch up.
• .
• ASX Li stocks, VUL is the standout, doing a new 52 week high this week. LTR/SYA/WC8/INR around 50% up from their lows. But both WC8/INR have lost around 30/40% from their recent high, but still good up from the low. But there are many stocks at or close to bottom. Small caps are suffering big. Mid-caps, equally bad, except a few like PLL. I am just talking about rise from bottom, not fall from top, which is another story. So in general, number wise, its very concerning and is still reflective of the sentiment still not being strong. Many stocks within 10/20% of its lows - WR1/AZL/ASN/PMT/GL1/CXO etc. Not good numbers there.
• 
  
• What the numbers seem to say that in order for gains to be made by most stocks, we need another phase, the Phase 2 I am talking about recently. Another 30/50% increase. It can be led by Chinese, it can be led by big stocks, but I feel we need it for sustaining the rise. Otherwise I feel it could be a slow grind, could even to be on the downside. Hopefully within next few weeks. Lets see.
• 
  
• REE Sector overview - REE sector mirroring Li play, so don't need to write something different.

.
.
.Personally:
This week I am in a different place compared to last week. From a sector perspective play, last few weeks I was two thirds U and one-third Li.
.
I didn't like how U was playing. So thought will get out and wait for confirmation. Many U stocks either I got out completely, or got out substantially. Took a hit, between 5 to 8% on some plays. I didn't like how CCJ is still not confirming. I didn't like how ASX U stocks were feeling very weak. I didn't like how PDN/PEN played out.
.
I have added more to Li stocks. Many which I was holding from before, some I have nearly doubled. Others I bought for this phase. Not that there is confirmation of next phase. But, I look at certain patterns of trading, and there are signs next leg could happen. No guarantee though. Even yesterday, after big drops in Chinese Li stocks, ALB could have gone down. But I had felt and written that ALB may hold this level, above 102. It did. That's a good sign. We need more confirmation. So I have taken a punt here.
.
Other usual plays which I have been writing for quite sometime. Have hedged to some other stocks while U/Li sort themselves out.
.
.
Stock/Sector specific Info:

• This week ENR had a consolidation play in mid 30s, same as last 2 weeks, on average volume. Clearly consolidation. playing very narrow now range. No direction for now. .
• From a weekly perspective, moved from 35.5 to 34, slight drop. But now stabilising. Seems to be consolidating at this level. Needs to hold 30 even on a bad play
• Last week I wrote my average was 36. I wrote last week that till 30 is being held I will hold, but will try to reduce my average by playing some. This week it played in narrow range, so no trades for me, still at 36.
• REE stocks that I track lost 4% for the week
• REE stocks have lost 9% across 30 REE stocks for the year
• General markets looking very good, now in bullish phase, LI sector Phase 1 rise complete, now consolidating - we could mirror Li play, so watching that.

.
Here is the Figures for the Week:
..
.