Jump to content

ASX 200: three stocks to watch as of 23 January


MongiIG

Recommended Posts

Tony Sycamore analyses the Material Sector and looks at three ASX-listed lithium miners.

 

BG_iron_ore_mining.jpgSource: Bloomberg

 

 Tony Sycamore | Market Analyst, Australia | Publication date: Monday 23 January 2023 

ASX 200 overview

The ASX 200 added 17 points (0.57%) on Friday to close at 7452, locking in a 1.7% gain for the week. With a week left, the ASX is up 5.87% for January, reclaiming all of December’s losses and more to be just 2.3% below its all-time highs.

At a sector level, the influential Financial Sector kicked into gear over the past fortnight to be +4.68% for the month and the year. At a stock level as per last week’s closes:

Elsewhere, the Materials Sector, which now accounts for 32% of the index, has captured headlines after a mammoth 9.68% rally in January. Some of the more notable moves this month have been:

Drilling down a little further into the Materials Sector despite the price of Lithium trading 20% below its November highs (on forecasts for supply to outpace demand), ASX listed Lithium stocks continue to generate strong trader interest.

In this week’s Three Stocks to Watch, we review the recent news and charts of three ASX-listed lithium miners.

  • Pilbara Minerals (PLS)

Pilbara Minerals is our preferred play in the lithium sector as one of the few producers operating at a profit. Pilbara’s production and export volumes have increased over each of the past three quarters, and its cash balance stands at almost $ 2.4 billion on a market capitalisation of $ 12,472m.

Pilbara’s share price added 13.18% to $4.55 on Friday after a production update (released Thursday) beat forecasts by 16% and its shipment forecasts by 4%.

Friday’s surge higher rally has triggered a break of the downtrend from the triple high at $5.60/66 and indicates a medium-term low in place at the early January $3.57 low. Upside targets are resistance at $5.00, followed by the $5.61/66 triple high.

Pilbara Minerals daily chart

 

AUstocktw1230122.pngSource: TradingView

  • Liontown Resources (LTR)

Liontown Resources with a market capitalisation of $3,437m fell 8.33% to $1.37 on Friday after warning of cost blowouts at its Kathleen Valley site. Originally expected to cost $240.5mn to develop in 2019, the project is now expected to cost $895mn, the fourth time costs have blown out since 2019 on strong inflationary pressures.

The share price of Liontown has spent the past seventeen months trading between .84c on the downside and on the topside, the double top at the November $2.22 high.

The decline from the November $2.22 high appears to be missing a leg below the December $1.195 low, which would complete a five-wave Elliott Wave decline. With this in mind, we would only consider buying Liontown Resource shares after they fell below the $1.195 low, ideally into the support ahead of $0.84c.

Liontown Resource daily chart

 

AUstocktw2230122.pngSource: TradingView

  • Core Lithium (CX0)

A bearish research note from Goldman Sachs on the Lithium Sector in mid-November was the catalyst for many ASX-listed Lithium miners’ share prices to tumble between 30 and 50%. With a market capitalisation of $2,198m, Core Lithium was not spared as its share price fell 50% from $1.88 to .94c.

Its share price rebounded back to $1.27 during the first weeks of 2023, only for Goldman Sachs to publish a follow-up research note on the 12th of Jan reiterating its sell rating on CXO and a $.95c price target. Its reasons were based on the rally in January running ahead of fundamentals and production risks associated with the ramp of the Finniss project.

Technically the share price of Core Lithium appears to be missing a final leg below the December $0.94c low, where we would be interested in being a buyer.

Core Lithium daily cahrt

 

AUstocktw3230122.pngSource: TradingView

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,170
    • Total Posts
      90,690
    • Total Members
      41,274
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    toshendra
    Joined 27/01/23 19:31
  • Posts

    • I am a beginner, and I must say, there are a lot of rules to the trading game that one must abide by if they want to be successful.   Here, the writer mentions several basic rules for day vs swing trading.  However, I find that often times, the reasoning for these rules is not as  obvious for a beginner as it may be for an expert.   The 'why' factor if I may. For example, why must you have a large capital to trade with as a day trader? Because your positions must be large so that a small change in price will be augmented and turned into a large profit. Also, with such high risk, the margin will be specially high, given the trader is taking up large positions at a time.  Without a large amount of capital, positions may be forced to close due to funds being below margin requirements.  When this happens, you can expect to lose tons of cash, fast.  I learned the hard way. All the best, David Franco      
    • USDJPY has been regaining ground this week, but inflation differentials and a three-month trend signal the potential for another turn lower Source: Bloomberg      Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 27 January 2023  USDJPY set for third monthly decline The USDJPY pair has been on the slide since its October high, with the historical 147.63 resistance level ultimately marking the end of the dramatic 21-month rally that saw the pair gain almost 50%. Much of that came through a period that saw US inflation soar as Japanese prices remain subdued. That disparity remains, but the direction of travel has certainly shifted as US CPI declines and Japanese price growth gradually ticks up. The overnight 4.3% figure for Tokyo core CPI represents a four-decade high, with the nationwide figures likely to follow on. The chart below highlights how USDJPY has been heavily correlated with the now tightening gap between US and Japanese inflation. However, it is more evident when shifting that inflation differential forward by seven-months. That close correlation highlights the potential for further downside as long as prices continue to trend in a similar manner. Source: ProRealTime Looking at the daily chart, the recent rebound has taken price up towards the top-end of a descending channel and Fibonacci resistance. This highlights the bearish pattern that has been playing out, with lower highs and lower lows in place in recent months. Unless we see price rise through trendline and 134.77 resistance, another turn lower looks likely for this pair. Source: ProRealTime
    • @MongiIG Hi - You recently covered Long NICKEL Trading the Trend and A. Rudolf did this morning but I see it is Closing only. Please clarify, Thanks D600
×
×
  • Create New...