Still no direction for sector, drifting lower ?.From a weekly...

Still no direction for sector, drifting lower ?

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From a weekly perspective, LRS moved from 18.5 to 19. A small gain, but eventually succumbed to how the sector was splaying.

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So what is happening? Its now 3 weeks I have been writing the same thing. The Li sector looks to be in a confused state, with no strong direction. Usually, in this type of scenario, when it lacks a strong momentum, stocks drift down. But its not a sell off, usually a slow decline. I feel that is what we saw for the Li sector this week. We are still playing a game of cat and mouse between Chinese Li stocks and US/ASX Li stocks. They have decided, for quite sometime now, in fact several weeks now, that they will not go in tandem. If one rises, other takes a breather. And vice versa. So we have not been able to get a very strong momentum for the Li sector. ALB made a big move couple of days this week, reached 99, but was not able to breach 100. Currently sitting at 94, last week 93, so not much of a play. Chinese stocks are doing the same. Big swings. Sometimes 5% gain on a day, or a loss. Or within a day rising and giving up. Both Ganfeng and Tianqui, around average 1% down for the week. So same play as ALB till now. This is clearly sign of consolidation. At this stage, no strong movement either side. I think we may have to wait.
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On the positive side, this looks like consolidation. Li stocks have risen 30/40% from their lows. I wrote last week I felt this was Phase 1. We have played that. Now we are waiting for Phase 2. Will that be another 30/40% rise from here, or we give it all back? We don't know. But at least the held is a good sign. Odds favour an upside even though it may not be immediate. On the negative side, if we don't make a move soon, stocks, which are drifting down, may continue to do so. So may become a bigger task even to cross the recent highs. So a work cut out. So we don't want to stay here in this state for too long. I think, for now we are fine. But another week or two, may bring in the slow decline. So lets hope we hold here and we move up slightly.
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LRS too is playing the macro. A lot of ASX Li stocks were feeling the confused state and drifting down. LRS too did the same. When it was feeling great, it though, it could overcome the macro. Got over 20. But finally succumbed. Macro is too strong. I have said main play is 20 first (and stay above that) and next 24. On weakness 18, and then 15, but before that 17. So a wide play. Unless Li macros gets a strong direction, it could just drift between those numbers.
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Personally, overall, last week I wrote that I was one third Li stock and two third Uranium, in terms of where I play the sector, not other individual stocks. I am still the same. But I did a lot of trading this week. Couple of days back I had nearly got out of all my holding in Li stocks, but bought back today. So my holding is the same, but I have been lucky to reduce my averages.
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Personally, for LRS, I wrote last week that I had picked some at18.5. I let them go this week at 19.5, just on Li macro play. LRS didn't get over 20 in a decisive way, so I thought I will wait. So small gain, but I play numbers, level to level, nothing great, but that's how I play.
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So what may happen next week? Chinese stocks were going great guns today, rising nearly 5%. It looked like they will give the US Li stocks the much needed thrust which they were waiting for. Opportunity for ALB to break 100 and get to 102. But slight chance to get above my number 106. I have been saying for several months now, ALB needs to get over 106 and stay above that, for reversal confirmation. It was looking good in first half in Chinese trade, but second half was a semi-disaster. Both Ganfeng and Tianqi gave away most of the gains in second half. They still finished green, but barely. So in one way killed that ALB 106. General markets too are in an iffy situation. They doing consolidation as well. That is not helping the cause. So a work cut out for tonight and for next week, especially with US elections. I don't have an opinion. I hope it plays out well. I will follow market. I know most are long-termers. We are in a better situation than 2 months, early September where most Li stocks made their 52 week lows. Lets hope we are in a even better situation after 2 months. In between, there may be noise, but should not deter long-term faith. Will that happen? Let's hope so. Enjoy your weekend and all the best.