Weekly Review Li Stocks - 9th Aug 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 Li stocks and like to trade. This is the reason I include a number of Li Stocks in my analysis. I also have performances of Li stocks for 2023 - for those interested in looking at longer term view.
Please note:
This is no reflection of all AU Li 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 Li average. This is just for my tracking and analysis. I have both ASX and US stocks in two separate figures.
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Please note that all my analysis are from a trading perspective looking at short-term view.
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This week I have not added any new stocks to list, so my list still contains 96 stocks.
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How are we going in 2024 - General Market
- SP 500 looks like it may have dodged a bullet. Intra-week, it dropped to 5119, just under 10% drop from high of 5669. If it had dropped further, many believed that instead of 10% drop we could see that dreaded 20% drop. But job numbers on Thursday helped and SP 500 finished the week at 5344, last week 5346 - so flat for the week. A good 4% recovery from the drop. Although not out of the woods, but looking healthier now.
- Volatility Index VIX is at 20.37, last week at 23.39. But there is a story within the week. Intra-week it shot up to 65, a number not seen since Covid. Even in 2022 June drop, VIX was able to stay at 30s. Many waiting to see market top to happen after VIX was supposed to reach 60s in 2022. That never happened then. So some unusual play this week. But at just over 20, its looking healthy. Below 20 is neutral to bull market, so it's not very far away now.
- Bitcoin too did its own drama. It plunged over 20% suddenly, dropped below 50k. But then recovered. Like VIX. Like SP 500. Currently at 60k. Last week was 61k. So regained all losses. Another indication that temporary bottom may have had happened this week.
- Sentiment Indicator - on 24, Extreme Fear, last week 27 Fear. Not surprisingly. The plunge on SP 500, VIX, Bitcoin etc have made punters nervous and wary.
- Russell 2000 was doing better in last few weeks than other indices, indicating good time for commodities, risk-on assets. Looked like rotation happening to small caps. All that has been lost in couple of weeks. Its back in it old territory of extreme weakness now, a play for last couple of years, and stuck with weakest index tag for some more time. Dropped from 2109 to 2080, a drop of over 1% for the week. In the shock plunge on Monday, it breached psychological 2000 number to reach 1993, but has recovered, who knows for how long.
- Yields had dropped big previous week, but has again started climbing, moved from 3.8 to 3.94 this week. Better than 2 weeks back but not going in right direction for rate cuts.
- Dollar Index too going like Yields, big drop previous week, now rising.
- Gold, Silver, Oil - no major direction.
- So overall markets looking like consolidating here, trying to assure the 10% drop to 5119 may be the bottom for now. But its still open ended, and till we breach 5669 on the up, downward drop of 10/20% is not gone, reduced odds, but there
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What may happen next week - General Markets/U/Li/REE:
- SP 500 is at another test this week. Last week I had written that this week will be a crucial test this week. It played out that way. Drop till 10% and recovery. For next week, even if it doesn't gain, but holds the level, that will still be very positive. One year back at this time it was 4103. So big gains have been made. Also it went into a straight line, not doing 10% drops - so was unsustainable. Many believe this 10% drop is healthy, this consolidation could be the base for next leg. So lets see.
- All these days we were talking about rate cut. Markets rose getting close to it. A big twist has come now. Those pushing down believe Recession is the big play now. So change in narrative. Lets see if this narrative continues this week.
- Russell 2000 was a big disappointment this week. Its not looking good. All the positivity which was building for last few weeks seems to have evaporated in couple of weeks. Lets hope it turns.
- Uranium Sector overview - I have been writing for couple of months, May top, July end bottom, September end top. CCJ to reverse from here. This week CCJ reached 35.43. It had reached 56.24 high. So a drop of just over 37%, close to 38% those who play Fib. I follow patterns. There were 2 numbers in my mind - 35 was the first high it had reached after breaking 20s, so some support was expected there. Failing which 32 which 52 week low. It has come back from 35. While it was dropping the numbers I was looking to watch 45, then 39, then 35. So going up again crossing 39/40 is crucial. Then getting over 45. After that very good chance of reaching 65 in next couple of months. It finished Friday at 39.55 - so sitting right at a very crucial point. Which side will it tip? I feel if general markets behave, it may go up. I had exited all my U stocks end of May. I was writing for last 2 months I will buy over here. I have bought 40% of what I want to buy this week. Will be watching now to see what to do.
- Lithium Sector overview - I am writing same as for several weeks now, no change, sadly for Li holders. Close to 2 months back I wrote that - "Lithium sector is in serious trouble". Nothing has changed. We are in more trouble. At this stage, one would think the sector is nearly dead. No new money will come here. Last week was bad. This week was another forgettable week. ALB that I track to get sentiment, dropped another decent chunk, from 87 to 81 level, making a new 52 week low at 79. I think it is reaching a stage of complete capitulation. No one knows where the bottom is. Ganfeng too at 26.90, close to 52 week low of 26.30, so not looking good. For last couple of years, every week people feel it has dropped a lot, may be its bottom. But then it falls again. And again. So we don't know where the bottom lies. Money is getting out of sector. Li macro is very poor. One solace, if general markets too were to collapse, it may have gone worse, or who knows, everything going bad, a collapse may have moved from tech/Magnificent 7 into resource, so hard to predict. Good market is not helping. Will bad market make it worse, or better for Li stocks? Not an easy answer.
- REE Sector overview - I feel same as last week. REE stocks overall have done better than Li stocks. But now over 1 month, big signs that it is falling in line with the malaise happening in Li sector. So the bright spot which was there, I can feel its no longer bright. Its getting very serious now. Few stocks had done very well - WA1/BRE/ENR/MEI etc. All faltering now. Signs are not good, especially now that general markets are also looking into going into consolidation/correction mode. So I feel extreme caution now required for new entry. For last 5 weeks, across 30 REE stocks I track, we were in red for consecutive 5 weeks, so not a good look. This week another drop of 5% across 30 stocks.
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Personally:
This week there was a big change for me. I bought a lot of U stocks, have done 40% of my U shopping. If markets behave and U stocks look like they may have bottomed for this phase, then I will buy the rest. If something does not look right, I will exit immediately, with very low tolerance. I am not that much worried about U stocks on its own falling much bigger from here, but if general markets tank and SP 500 goes into 20% correction, it will drag U stocks down as well. That's my thinking, could be wrong, so please dyor. Otherwise I am playing very cautiously, not playing Li/REE at this stage. Just a few stocks here and there. For Lithium/REE I don't think in short-term sentiment may change, so may wait. Other plays in health stocks, with some splattering across Gold and Oil/gas - most of these I play standard spreading the money, so don't usually write there, but currently I have got around 10 stocks in these sector I am playing there.
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Stock/Sector specific Info:
- This week SYA trying to hold 2.7c. Last week I wrote its trying to hold 3. Succumbed on Monday itself, and since then 2.7. Its very concerning. Not only for SYA, but overall Li sector itself. Where is the bottom? From its high of 39c a drop to 2.7 means it has lost 93% of its value since that time. Market practically saying this will not be a going concern. I don't know the fundamentals, but price action somehow seems to be saying that. Market cap has now gone down to around 277m. I hope things turn out soon in a positive direction for holders, but feel a bit more pain before gain. Next number everybody must be thinking is 2.5. Volumes have considerably decreased. In last 10 weeks only 2 days above 100m. Low volume last few days may be saying about bottom, but trading pattern now for several months is consistent downwards. We used to get some bounces at different times. That too has dried up. Concerning, but I still feel one day it will turn, question is how much one can sustain, for weeks, months and years. Need a lot of resolve.
- From a weekly perspective moved from 3 to 2.7, a drop of 10% for the week
- ASX Li stocks that I track lost 6% this week. So 5 consecutive weeks of red now. Probability says we should get a green soon, it happens when you toss a coin, it should happen here as well. Lets see.
- US Li stocks dropped 5%. Last week it dropped 12%, so big, big declines in the sector.
- Li stocks down 48% for the year, so not a good look. It means, since 1st an 2025, on average across 90 stocks, they have lost half their value. And this is on top of declines last year, and year before. Very concerning.
- On Friday general markets were in green, but not US Li stocks, small red across the board. So a timid/weak start on Monday, but don't expect any big drops, just trying to hold the level to see what happens on Monday night in US.
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Here is the Figures for the Week:
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Figures for US Li stocks
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(20min delay)