Global Lithium Resources Limited

Global Lithium Resources Limited (ASX: GL1) is a lithium exploration company. GL1 is mainly focused on the 100%-owned Marble Bar Lithium Project (MBLP) in the Pilbara region of Western Australia.

Financial and Operational Update: The company recently advised that it has issued 17,105,199 ordinary shares and 4,800,000 unlisted options with an exercise price of $1.00 per option and expiring 12 November 2024, post the shareholder approval attained on 20 December 2021. Besides, on 23 December 2021, the company mentioned that it has agreed to acquire an 80% stake of the lithium rights in the Manna Lithium Project from Breaker Resources NL (ASX: BRB) for a consideration of up to $33.0 million. On 21 December 2021, the company stated that it continued to receive significant lithium assay results for the CY4Q Exploration Program at the Marble Bar Lithium Project.

On the financial front, GL1 has delivered a consolidated net loss after income tax of $1.22 million in FY21 (2020: $6,683). Besides, the company is well funded with around $20.9 million in cash post completion of the raising, which will be utilised towards driving exploration targeting and drilling.

Technical Analysis

Daily Price Chart

Note: The purple color line in the chart depicts RSI (14-period), while the yellow color line represents the trend line. The sky-blue and red-color lines show 21-Period SMA and 50-Period SMA, respectively. The green-color histogram at the bottom of the charts represents daily volumes.

On the daily chart, GL1's prices witnessed a sharp upside movement in the past couple of sessions and currently facing the resistance of an upward sloping trend line, indicating the possibility of a downward correction. On the daily chart, the leading indicator RSI (14-period) is trading in an overbought zone at 77.22 levels, further supporting a downside correction. However, the trend-following indicator 21-period SMA and 50-period SMA is trading below the CMP and may act as support levels for the stock. Now an immediate support level for the stock is placed at AUD 0.80 while resistance is at AUD 0.99 level.

Stock Recommendation

The company intends to undertake significant exploration and drilling activities at the Manna Lithium Project in 2022, including following systematic exploration methods to build on the targeting and drilling work already completed and undertake a broad drilling campaign in the immediate project vicinity more regionally. Further, the company is progressing towards declaring a maiden JORC Mineral Resource. Further, GL1 aims to undertake various existing and newly identified lithium targets in CY2022 that remain untested.

Considering the facts above and the current trading levels, we give a “Watch” recommendation on the stock at the closing market price of A$0.90, up 12.499% as of 29^th December 2021.

Eastern Resources Limited

Eastern Resources Limited (ASX: EFE) is a mining and exploration company. EFE is involved in operating, developing, and exploring North American-based mining properties with significant proven reserves of precious metals and base metals. The company holds three fully permitted mines in Montana, with substantial gold production anticipated.

Financial and Operational Update: The company recently updated that its wholly-owned subsidiary Gippsland Iron Pty Ltd, has received the retention license for the Nowa Nowa iron project in east Gippsland by the Department of Jobs, Precincts and Regions on 21 December 2021. Further, on 22 October 2021, EFE announced the company's change of name from Eastern Iron Limited to Eastern Resources Limited.

Besides, on 16 December 2021, the company declared the appointment of Mr Myles Fang as its Executive Director. On 15 November 2021, the company signed a strategic partnership agreement with Ya Hua International Investment and Development Co. Ltd, a wholly-owned Sichuan Yahua Industrial Group Co. Ltd subsidiary. This partnership aims to deliver a framework concerning lithium projects' potential acquisition and development.

On the financial front, the company has reported a loss after income tax expense of $0.59 million in FY21 compared to a net loss of $0.46 million in FY20. The company holds cash and cash equivalents of $3.692 million at the end of the quarter ended September 2021.

Technical Analysis

Daily Price Chart

Note: The purple color line in the chart depicts RSI (14-period), while the yellow color line represents the trend line. The sky-blue and red-color lines show 21-Period SMA and 50-Period SMA, respectively. The green-color histogram at the bottom of the charts represents daily volumes.

On the daily chart, EFE's prices are sustaining below an upward sloping trend line breakout level, indicating the possibility of a further downward movement. On the daily chart, the leading indicator RSI (14-period) is trading in negative territory at 44.42 levels, supporting a downside bias. The trend-following indicator 21-period SMA and 50-period SMA is also trading above the CMP and may act as resistance levels for the stock. Now an immediate support level for the stock is placed at AUD 0.0480 while resistance is at AUD 0.0600 level.

Stock Recommendation

The recent strategic partnership agreement with Yahua will aid the company in acquiring along with developing lithium projects. This will enable the company to fortify its position in delivering green energy solutions for future generations.

Therefore, considering the facts above and the current trading levels, we give a “Watch” recommendation on the stock at the closing market price of A$0.054, up 1.886% as of 29^th December 2021.

Endeavour Group Limited

Endeavour Group Limited (ASX: EDV) is Australia's leading retail drinks and hospitality business. The Group is involved in operating Australia's largest retail drinks network and the portfolio of hotels.

Financial and Operational Update: In the first quarter trading update, the company stated that its trading environment in Q1FY22 continued to be affected by Covid-19. Although the retail trading momentum was maintained during the period, its hotels business was substantially impacted by the lockdowns in the critical states of Victoria and New South Wales. The overall sales during the period declined by 1.2% YoY to $2,936 million. Despite the challenges, the group has invested in developing and enhancing its hotels business and implementing digital order and pay technology across its hotels in Q1FY22. On the financial front, EDV has delivered a consolidated profit after income tax of $445 million in FY21 compared to a loss of $64 million in FY20. Further, it has provided an operating cashflow of $1.1 billion in FY21.

Technical Analysis

Daily Price Chart

Note: The purple color line in the chart depicts RSI (14-period), while the yellow color line represents the trend line. The sky-blue and red-color lines show 21-Period SMA and 50-Period SMA, respectively. The green-color histogram at the bottom of the charts represents daily volumes.

On the daily chart, EDV's prices are sustaining below an upward sloping trend line breakout level, indicating the possibility of a downside movement. On the daily chart, the leading indicator RSI (14-period) is hovering around mid-point and currently trading at 53.66 levels. The trend-following indicator 21-period SMA and 50-period SMA is trading below the CMP and may act as support levels for the stock. Now an immediate support level for the stock is placed at AUD 6.50 while resistance is at AUD 7.50 level.

Stock Recommendation

The current pace of vaccination would enable the company to return to more normal operations in time to cater to the festive and the summer period. Additionally, the group is better placed for growth driven by its expanded range of quality hotels, solid retail brands and digital assets and a resilient team.

Considering the facts above and the current trading levels, we give a “Watch” recommendation on the stock at the closing market price of A$6.92, up 2.215% as of 29^th December 2021.

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 on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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