A good rise, now a pause, something not right?..
From a weekly perspective, WC8 was the start and envy of most ASX stocks, forget about Li stocks. Rose from 26 to 37 with a high of 40.5. Very strong play.
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So what is happening in macro? Turbulent times. Volatility has increased considerably. Greed and fear alternating. Punters confused. US Li stocks had a reasonable increase. Most stocks around 40 %above their lows, and they have kept the gain they made recently. ASX Li stocks doing the same. Chinese Li stocks were lagging previously. So they did 3 consecutive 10% increase days. Caught up to others. After that they had to hold like US Li. But they are not playing the game. Lost 10% yesterday. Another 6 to 8% today. So not a good sign. I have always said that for sustained increase, we need all Li stocks to go in tandem. As I have been writing, we cannot have a party, without Chinese Li stocks. They can lag for short periods, but then have to catch up. But they are playing truant again. Not completely given up the gain, but looking very vulnerable. So now we have a question mark on the rally. Next few days may provide more than direction, but a caution sign has been given.
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WC8 is playing its own game. Something is different. Last time this type of play happened, I was playing from 30s to 90s and writing everyday, couple of years back. A similar price action. The only thing different is overall Li sentiment. Currently its not great. That time neutral to positive. So had a great run. over 250% gain in short period. But its not bad now. WC8 made a low of 18.5 recently, now 40.5 high. Close to 115% gain, in very short period. Its playing unlike other Li stocks. So something is happening. It looks more than just some getting excited. We will know more, I feel, shortly.
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Personally I did not like the Chinese play. I play trading pattern, number, etc, and something didn't look right to me. So I have exited most of my WC8 for now. Last week I wrote my buy average was 22, I sold from 36 to 40, average 38, so had a gain of around 70%. I now have a very small holding. I know when WC8 goes ballistic, it has no limits. But I was happy with my win. In fact I feel I was lucky. I was buying when it was not loved around 20s. It was one of the rare Li stocks I was buying when sentiment was very poor. So I knew I was taking a risk. I had written last week that WC8 has suddenly become one of my biggest holding. I was conscious of that. So, I thought to reduce risk as I had a good gain, and also I was playing macro and managing my risks as I didn't like some signs of macro. Will be happy to buy back soon, even higher, if signs are good. I know most here are long term and anyone who sells, like me, for whatever reason, is not someone wants to see. My play is different, I try to minimise my loss, may not be the best play, so if possible, understand how I play. I know most gains are made by holding long, but I have always written I trade a portion of my holding. I could have got it wrong, so please dyor. I sometimes receive flak when I say I have sold a few, but as most can understand, my play is completely insignificant to what happens to share price. The reason I write is that every stock I write, I write when I buy, with price, when I sell with price. Not sure why I do, with hope that it may help someone,
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So what may happen next week? A lot depends on tonight. Till now, from bottom, the play has been that US Li stocks have taken the lead, went ahead, and kept the gain. Chinese Li stocks have then caught up. Last week, ALB was pushed down whole week, but it held 94. And then bang on Friday, it moved to 102. Same play this week. Whole week has been pushed down, but has held 102, even when Chinese stocks dropped 10% yesterday. We need another bang, maybe tonight, and straight to 110+, more importantly, above my number 106. Chinese stocks can catch up next week. Will that happen? Let's hope so. Enjoy your weekend and all the best.
(20min delay)