Which way will PMT go next?.
From a weekly perspective, PMT remained flat on 31.5.
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So what is happening in PMT? Overall weak. Recent strength. Now reaching a state - of confusion.
Like last few weeks, 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. Second week in a row, now dropped over 10% from its high.
- ASX Li play - ASX Li stocks have now clearly diverged from major plays of other jurisdiction, like ALB (US), Ganfeng (China). Playing extremely weak and towards their bottom, whereas most US/Chinese stocks 40/50% above their lows.
- PMT Play - This hot and cold stock, which dropped deep to 24, looking slightly hot, now doing the reverse, jumping to 34 - but getting pulled back. Looks like reached a decisive state.
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PMT is just following the Li macro, the ASX Li macro, and playing weak. From a numbers perspective, overall weak, small strength. But a vulnerable strength. There is no guarantee. Suddenly one day, on general weakness, it could be again fishing for bottom. So need more for any confirmation of strength, otherwise I feel, technicals in control, as they do to hot and cold stocks.
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Last week I mentioned that ASX punters are playing very weak across a lot of risk on stocks. And this play is just not Uranium or Lithium. There are 2 pressures. One, globally, risk-on sectors, spec play is weakest in last several years. More or less dead. Secondly, ASX punters are not even playing like their overseas counterparts, playing more weak. A combination of these two has made it deadly, sentiment rank poor, any positivity is based on miracles rather than numbers or trading patterns. Only thing on our side - this is going on for some time, law of probability and history suggests that things will turn one day. We may be getting closer to that day/period. Lets hope.
ASX Li stocks which were lagging big time US and Chinese Li stocks, had to make gains and bridge the divergence. Instead, as US/Chinese Li stocks are sliding slowly down, ASX Li stocks are also moistly drifting, many trying to hold the current levels. But still weakness across the board.
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Personally, I did pick up some Li stocks last week. I was hoping for a bounce this week. On Monday ALB did a big jump and crossed 113, finished at 109, from its previous week close of 104. It looked like the bounce play may happen. But Chinese Li stocks didn't support it next day. No big drop, but still in red. ALB needed a boost, it did not get one. Since then all its effort is in trying to hold this 102/104 level. Not extremely weak, but lost the exuberance of Monday. I started offloading some of my Li stocks, most at break even from my buy of last week. Still hold some. I had written last week I had let go most PMT because of its strength. I did buy some when it went to 30, but got out at 31.5 after it didn't look doing another 34. I wanted to hold but didn't like the macro play, so thought will exit and see what happens next.
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So what may happen next week? Chinese Li stocks had a decent drop today of over 3%. On a weekly basis, they have dropped between 3 and 5%. So the strong play that was happening couple of weeks back is definetly not there now. Have they made a top couple of weeks back and will retreat? Or they are consolidating after decent gain to prepare for next leg up? No strong signals yet. Tonight crucial play for ALB. Can it hold 102/104 level or drop below 100 after seeing the Chinese play today?. If it drops below 100, it may be a rough start for us on Monday. But if it holds, slight red or better green, then concept of consolidation will be alive and keep the hopes of ASX Li stocks recovering in short period - may be a Santa rally. Will that happen? Lets hope so. Enjoy your weekend and all the best
(20min delay)