AVZ Minerals Limited (ASX: AVZ)
AVZ is a mineral exploration and development company having Manono Lithium and Tin Project as its key operating milestone projects. The company was listed on ASX on 14th September 2007. As of 21st April 2022, AVZ holds a market capitalisation of $4.16 billion.
Business Update – Announced on 13th April 2022, AVZ received a positive technical opinion from the Department of Mines for imminent decision on the award of the Mining Licence towards its flagship Manono Lithium and Tin Project. Announced on 1st April 2022, AVZ successfully received the extension of the Transaction Implementation Agreement with Suzhou CATH Energy Technologies to 30th April 2022.
H1FY22 Operational Update – AVZ completed $115 million in capital raising and increased its direct stake in the Monono Project from 60% to 75%. The company upgraded Monono 2012 JORC Proved and Probable Ore Reserves Estimate to a whopping 131.7Mt, up by 41.6% from 93Mt reported in April 2020. As of 31st December 2021, the company held a cash balance of $76.31 million and net assets of $203.49 million.
Technical Analysis: AVZ prices have moved up significantly in past 10 months as the prices made an all-time high of AUD 1.365 level in April 2022. However, prices are now getting resistance of the upward sloping trend line that indicates profit booking might occur in the stock in the coming period. Also, there is a negative RSI divergence with prices clearly visible on a weekly chart that further supporting our watch stance on the stock. RSI (14-period) is hovering at extreme overbought region i.e., ~80.74 on a monthly chart that indicates profit booking might occur in the stock any time soon. Immediate support levels are AUD 1.00 and AUD 0.790, while immediate resistance levels are AUD 1.21 and AUD 1.31.
Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Considering the company’s current price levels with resistance, investing in this stock at such uncertain levels should be taken with a calculated approach; hence a ‘Watch’ stance is suggested. The stock was analysed as per the closing price of AUD 1.110 per share, down by ~5.93%, as on 21st April 2022.
Daily Technical Chart – AVZ
Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.
Resistance: A level where the stock prices tend to find resistance when they are rising, and the uptrend may pause due to profit booking or selling interest.
The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend (Vice – Versa).
The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend (Vice – Versa).
The Yellow colour line represents the Trendline.
The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.
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