ASX All Ordinaries Index (.AORD) Market Round-Up

Last week, ASX All-Ordinaries Index (.AORD) closed in green after global indexes including Dow jones made a new 52-week high. AORD settled at 7014.60 with an increase of ~1.03 percent for the week ending March 12, 2021. The index prices were consolidating in the range between 6885-7038 level during most of the trading days last week.  

Australian indexes took positive cues from the NAB Business confidence data for February 2021 which rose to 16 points, the highest level witnessed since 2010, from 12 points in January 2021. Also, as per the data released by Melbourne Institute, the expected inflation rate rose by 0.4% points in March 2021 to 4.1% compared to 3.7% in February 2021.

As per the technical indicators, prices are still reflecting a golden positive crossover between the 21-period SMA and 50-period SMA indicating a bullish trend. The index is getting an immediate resistance at 7290 level on a weekly chart that is near to the index's recent high level.  The upcoming data events that may impact the market sentiments include an update on Australian Quarterly House Price Index data, Australian Employment Change data, and Retail sales data released monthly.

Global Markets Wrap-Up 

Wall Street soared sharply last week taking cues from lesser number of US jobless claims data. S&P 500 made a new lifetime high and settled at 3943.34 with an overall gain of ~2.64 percent while NASDAQ Composite Index settled at 13,319.86 with an overall gain of ~3.09 percent for the week ending March 12, 2021.

Global indices reacted positively over the US weekly jobless claims data which declined last week to 712,000 from 754,000 the prior week. Meanwhile, the US President Joe Biden signed the US$1.9 trillion stimulus bill last week which also boosted the market sentiments by a certain extent.

Having understood the US market performance over the past one week, taking cues from major global news, and based on our technical analysis of ASX All-Ordinaries Index (.AORD) for the upcoming week, now let us have a look at the two ASX-listed stocks  from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for Hastings Technology Metals Ltd. (ASX: HAS) and Core Lithium Ltd. (ASX: CXO) for the next 2-4 weeks duration.

Hastings Technology Metals Ltd. 

Hastings Technology Metals Limited (ASX: HAS) is a rare earth metals company engaged in the exploration of natural resources. Its projects include Brockman and Yangibana. The summary of stock’s key price indicators is provided below:-

Price Action Analysis (on the Weekly Chart)

HAS' prices are forming a series of higher tops and higher bottoms and sustaining above an upward trendline. Recently prices took the support of an upward trend line and started to move upside. The next important resistance level appears at AUD 0.280 and prices may test that level in the coming sessions. Any further movement above AUD 0.280 accompanied by increase in volumes may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~56 levels, indicating a positive trend for the stock. The CMP is trading above 21-period SMA and 50-period SMA which might further provide strength to the stock prices.  

Financial Summary: 

Summary of the Key Financial Metrics for the past four years for Hastings Technology Metals Ltd. is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Hastings Technology Metals Ltd. is looking technically well-placed on the chart and we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investor’s appetite on upside potential, risks and any previous holdings. This recommendation is purely based on technical indicator analysis, and fundamental analysis has not been considered in this report.  Summary of our recommendation is as follows:

Core Lithium Ltd. 

Core Lithium Ltd (ASX: CXO), formerly known as Core Exploration Limited, is a lithium exploration company. The company is involved in the exploration of lithium and copper deposits in the Northern Territory and South Australia. Below are the key price indicators for the stock: -

Price Action Analysis (on the Weekly Chart)

CXO's prices were in a downtrend for the past 6 weeks and recently started to move upside after taking the support of an upward trend line at AUD 0.175. For the short-term (2-4 weeks), we can expect further upside movement in it and prices can test the major resistance level of AUD 0.325.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~63 levels indicating a positive trend for the prices. The increasing volume trend along with an increase in the stock’s price action further indicates the bullish movement in prices. The CMP is above the 21-period SMA and 50-period SMA, which might provide support to the stock prices.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Core Lithium Ltd. is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Core Lithium ltd. is looking technically well-placed on the chart and we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investor’s appetite on upside potential, risks and any previous holdings. This recommendation is purely based on technical indicator analysis, and fundamental analysis has not been considered in this report.

The summary of our recommendation is as follows:

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the ASX All-Ordinaries Index and listed stocks’ prices:

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risk, currency risks, and social and political instability risks etc.

Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation on either side in the ‘Entry Price’ can be considered depending upon the potential expected or indicated.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black 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.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume and we consider stocks with greater than or equal to 500,000 volumes as more liquid. Liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. We suggest ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. We suggest Investors to Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is March 15, 2021. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

AUD: Australian Dollar

RSI: Relative Strength Index

 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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