Meant to post this on Sunday but ran out of time, as I am on the other side of the world at the moment.
Last Friday's candle was a bearish Maribozu, a candle with no shadows or wicks, which signifies the buyers have run out of steam and the sellers are taking control. So, time for a pull back. All perfectly normal with the perpetual battle between buyers and sellers.
We have had a few attempts to take and hold 30 over the last few months, but unable to hold above 30, for any sustained period, which should then turn into 30 support. This is yet to happen.
So, our support levels are around 24.5, 23 and 21, which have proven to be historical support levels.
We may see a quick dip below that, but as last time, it rebounded very quickly. If you want to pick up some cheapies, I would be putting my orders in now, and wait for the eventual decay down, and if you are really lucky, you may pick some up in the low twenties, or high teens.
Having said that, there is a big upside here, particular versus the downside.
The pendulum is swinging back in our favour.
The shorts are continuing their progressive exit, and has been the lowest its been since November 2022 at 8.84%, and our fundamentals are as strong as ever. We have even processed some ore through the crushing circuit, which will now probably be used for testing the grinding circuit and then eventually the impurity removal and concentration circuits.
We still remain below budget and on time, with no time lost to accidents.
Its funny...I keep waiting for one of the updates to have something negative for the market to pounce on, but it hasn't come yet.
I guess it doesn't really matter when the SP gets clobbered anyway...
Execution so far has been on track, with the crew in Quebec performing very well.
The macro is continuing to improve.
Its not a lock yet, but we had our elusive golden cross on the S&P last Thursday.
The 200ma still needs to flatten out a little as its not quite horizontal or upward slopping yet, but its very, very close. the accuracy of this bullish signal is very high. The caveat here is NOTHING IS ABSOLUTE, but its looking promising.
This will be the catalyst for the markets to reassess their risk appetite and start pouring funds in. I have seen glimpses of it already this year, but it is not yet an accepted widespread theory that analysts and instos are subscribing or committing big funds to.
I know I keep saying this, but it really feels to me like the die hard bears are hanging in there and just trying to juice out as much as they can in these final days, because they can see the market sentiment has changed, and not in their favour. Many have started exiting, but these diehards are still squeezing some blood from the stone, and quite successfully, if I may add.
They sense the optimism and know if they can let it run,drive SP's up, pull some more retail funds in, push it down and hoover them up.
And like it or not, as derisked as we are, we are still a speculative stock.
This is where we need to be very careful. This transition of markets.
Do not set your expectation too high...yet..... and continue to expect to see the sp hammered back down.
And that goes with the expectation of the SP when we hit production.
PLS got smacked down hard in the early days of production, until they turned a profit, and that was months later.
Admittedly, they were not seeing US$6500 sc6 prices back then, but we will. If they had, they may have turned a profit very quickly and the SP would have headed north a lot earlier. They are a multi billion dollar juggernaut, and still being played....expect the same for us.
So, we will have immediate sales for our product at 900, as well as our own sales at these historically high prices of US$6K plus.
Remember, there is enough margin, even in the PLL offtake to turn a profit, particularly before Authier comes online.
Prices, which by all lithium expert accounts, will stay sustained for quite some time. So the early suppression of SP that PLS experienced may be minimal for us, and if we are lucky, there may only be upside from these current lower levels.
As I mentioned last week, with improving macro and improving fundamentals, there is only one way the MC will go.
If you can, hang in there.
A plethora of catalysts and studies to come, production, as well as our second offtake finalised before the end of the quarter, which should finally see our Korean exploits come to fruition . We may even have a possible left field Chilean announcement.
As for Moblan, my take is the cards are being played very close. We know what we have and it is not disclosed to the market, for fear of an aggressive take over, another entity trying to muscle in on the action
Additionally, it may be a key component of a future offtake and JV with the Koreans (posco/LG) and It may even be at their insistence, that we do not disclose what we have here....not yet anyway.
Let us see how this unfolds.
Yes, we will have our ups, downs and choppiness, but eventually, the fundamentals will pull us through, with the trade winds of the macro in our sails. And its not that far away....
Good luck everyone.
(20min delay)