Sector still thinking, confused?.From a weekly perspective, LRS...

Sector still thinking, confused?

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From a weekly perspective, LRS moved from 20 to 18.5, so only a small drop and average for the sector.
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So what is happening? Last week I had written how volatility had increased, it was a very confused state. This week there was no respite on that front, volatility and confusion. US Li stocks which were holding the fort, finally succumbed to the Chinese play. Two weeks back, even on weakness ALB held 94, which was positive. Last week, after reaching 102, it held there. But this week it gave back one floor of steps, back to 94. Its still nearly 30% above its lows. I had written, we need confirmation from ALB. It has to cross 106 and stay above that. It reached 105, very close, but failed to cross the big hurdle of 106. Both Ganfeng and Tianqui also playing weak throughout the week, except today, mostly second half of today. Made some good gains today, between 3 to 5%, it was higher but gave couple percentage in last few minutes. But it has given hope. US Li may recover a bit tonight. I am not sure ALB will reach the next rung of 102 tonight. But from weekly perspective, even after today's gain. Ganfeng still lost 2.5% for the week, which is not great. Last week it had reached around 38, now sitting at 31, its low is around 25. So somewhere in middle, around 25% from its low.

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LRS too is playing the macro. But I feel its playing average - not going out in one direction for now, strength or weakness. From a numbers perspective, once again 20 becomes important to go to next level of 24. On weakness 17 has to be held, else we may see 15. But now its tied to PLS, so play could be slightly different.

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Personally last week I wrote that I had got out half of my LRS at 21 from my average buy of 20. There was not much gain, but I didn't like the play, and had a feel it may go lower. Somehow it happened that way. I got out rest half at break even 20. So overall not much of a play. I was hoping to see a break of 24, but the hesitancy did not give me confidence. Last 2 years has been brutal for the sector. So I have become defensive with Li sector play. When I don't get a strong up signal, I get out and wait. I know most are long termer, but every one's risk reward is different. My play may not e good, but suits my temperament. I had a very large Li stock holding couple of weeks back, around 11 Li stocks, it was looking great, but now a pause, some confusion, so I will wait to see how it gets resolved. I had got out around 60% Li stocks previous week. Rest mostly I got out this week. Playing Uranium now from a sector perspective.

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So what may happen next week? Turbulent times. Mixed signals. Few weeks back, it was a very strong play. Many Li stocks rose up to 50% from their lows, even ALB, Ganfeng, many ASX Li stocks etc. But they have given back some. Most now sitting around 25/35% gains. So we still are ahead from the lows. But spot price is not great. Rio play had a good effect, now that effect wearing away. Need a catalyst or a strong price action. I feel we are in the middle (or upper half) of what was looking like a reversal. So possibilities is still good. Again want to see ALB above 106, Ganfeng above 36 - but most importantly stay above that. Till then, I feel confidence will be swaying with the ups and downs. Lets hope US Li have a good tonight on the back of Chinese play and at least get halfway back, like ALB around 98 or so. Will that happen? Let's hope so. Enjoy your weekend and all the best