Does PMT have its own story to tell?.
From a weekly perspective, a very good week, moved from 27.5 to 31.5. One of the rare ASX Li stocks doing well.
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So what is happening in PMT? Not sure. Couple of weeks back, it was one of the weakest ASX Li stocks. Now trying to take the mantle of strongest. What happened in between? No one can tell. Neither the weakness nor the strength can be taken very seriously. I feel after the big drop its now got towards the average of others.
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Like last week, there are three major factors in play- Li macros - This is overall in hold/slight weak state. Both the Chinese and US Li stocks easing a bit now after very good few weeks.
- ASX Li play - ASX Li stocks have now clearly diverged from major plays of other jurisdiction, like ALB (US), Ganfeng (China). .
- PMT Play - Playing macro, but not sure whether going in step - looks like still playing Macro strongly, its just the timings looks not in synch with others
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PMT play is still weak, not withstanding this week's gains.. It is just following the Li macro, the ASX Li macro, and playing weak. From a numbers perspective, I don't have a view. Best to have an open mind. It is playing strongly though, now, as if a big news is on the horizon. But is there one?
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Last week I mentioned that ASX punters are playing very weak across a lot of risk on stocks. Start differences now in my assessment across Lithium and Uranium stocks, which I follow very closely.
Eg Uranium, US stocks are doing new 52 week highs. Most ASX U stocks, either near their 52 week low, but at least over 50% below their 52 week highs. This is going for few months now.
In Lithium, similar story. ALB around 50% above its lows. Ganfeng just under 10% from its 52 week high, around 60% above its 52 week lows. And ASX Li stocks? Most close to their 52 week lows, if not at lows. Huge divergence. This is going for few weeks now.
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The message is clear..
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- Its a very bad time to play Commodities, Risk-on stocks.
- It is specially the worst time to play ASX Commodities and risk-on stocks.
- If one one wants to play these sectors - like Lithium, Uranium etc, don't play ASX stocks. Play US/Chinese etc.
I have seen and reporting this pattern in Uranium sector for few months now. I have started writing this on Lithium sector in last few weeks. This is based on numbers. I am not saying why that is happening, just reporting what looks like happening. As usual, its my interpretation, I could be wrong, so please dyor. Especially because to make a call like ASX arena is not to be played in these areas, is a very significant observation
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Personally, I was exiting most of my Li stocks for sometime, but have bought back a number of them today, with the hope that we may see a bounce. Not with great conviction though. Thinking that a consolidation is happening in US/Chinese, and when they come start rising, we may get some benefits. Lets see. I liked the strong play of PMT, I was buying on weakness last week, so let go some last few days in early 30s and moved to some others.
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So what may happen next week? After last few weeks of gains, Ganfeng had its first weekly loss, losing around 3.5% this week. But Tianqi still finished in green - so no collapse there, more a sign of consolidation. ALB lost 106, especially a big drop yesterday. Its below 102, just under though. So still in the range. Has to get over 102, more importantly 106. There is a chance tonight it may make an attempt. Whether its successful, is to be seen. I don't know what will change the attitude of ASX punters. Are we doomed? No one is ready to take any risk? Everyone is concentrating only on shorting? If something good needs to happen, we have to see a change. Current direction is very, very concerning. Time to be very cautious to play ASX risk/resource/commodity sectors - playing as a sector, individual stocks can still do well. I have a feeling things will change, but not sure when. Have not seen such a big divergence, sustained for such a period before. Lets hope we see something better next week. Enjoy your weekend and all the best
(20min delay)