Metro Mining Limited (ASX: MMI)

MMI is an exploration and mining company in Australia and China, focused on coal and bauxite ores. Its flagship project is the Bauxite Hills Mine property located to the north of Weipa on Western Cape York. The company was incorporated in 2006 and is based in Brisbane, Australia. The market capitalization stood at $39.17 million at $0.016 per share.

Financial & Operational Update – On 20^th July 2021, the company released the update stating it successfully raised $6.48 million on 15 July 2021 via Retail Entitlement Offer and on 5^th July 2021 the company raised a total of $10.45 million through the Placement and the Institutional Entitlement Offer. The total amount proposed on 25 June 2021 was $25.5 million, to strengthen its balance sheet and provide funding for the working capital. On the management front, the company updated that it's six and a half years old in practice, Chief Executive Officer and Managing Director Simon Finnis decided to step down from his roles in effect from 5^th July 21 and replaced by Mr Wensley. For the quarter ending 30 June 2021, the sales revenue (gross) stood at $31.7 million and site EBITDA stood at $7.4 million.  The cash balance was decreased for the period ending on 30^th June 2021 to $8.55 million from $15.41 million as of 31 March 2021.

Technical Analysis- The stock showed an overall downtrend with few spikes and traded closer to the lifetime low prices of around $0.015 levels. The relative strength index is at 42.529, which is in the middle range of the zone, pointing to directionless price movement. The 21 days simple moving average is hovering close to the stock price and placed at $0.015, diluting the strong trend indication from the current price.  Since the prices are near the lifetime lows, the support is placed at $0.012. For the prices to regain the uptrend, a resistance of $0.018 needs to be taken off with strong volumes.

Improving revenues, declining cash balances, and the lifetime low stock prices decouple the investment rationales as the prices are far from reflecting the improved recent quarter numbers. Hence, we give the stock the rating of ‘Avoid’ at the closing price of $0.016, as of 17^th August 2021.

Daily Technical Chart – MMI

Source: REFINITIV

ADX Energy Limited (ASX: ADX)

ADX is engaged in the production, appraisal, and exploration of oil and gas properties. Its few of the key projects comprised of Gaiselberg and Zistersdorf fields in the Vienna basin, Austria; the Nilde Oil Field offshore redevelopment project in the Strait of Sicily, Italy; and the Parta exploration permit and Iecea Mare production permit in Western Romania. The company was incorporated in 1983 and is headquartered in Subiaco, Australia. The market capitalization stood at $18.60 million at $0.007 per share.

Financial & Operational Updates – On 29^th July 2021, the company released its activities report for the quarter ending 30^th June 2021, stating the updates on its production and exploration activities. Its Vienna Basin Fields, Australia project recorded an increase in Oil and Gas production by 33% (averaging 348 BOEPD for the quarter) and the sales revenue grew by 51% to EUR 1.61 million for the quarter. The company acquired the license for various exploration activities across projects as drilling Anshof-1 well and Parta Exploration in Romania. On the financial front, to the receipt from customers stood at $2.51 million on 30^th June 2021 and cash balance for the period ending 30^th June 2021 stood at $4.16 million.

Technical Analysis- The stock is in a downtrend forming lower lows and lower highs and entered a low volatile zone. The relative strength index shows 43.217, which is in the middle zone of the range, implying the prices are moving in a range-bound manner. The 21 days simple moving average is placed at $0.008, which is closer to the stock price, indicating a lack of clear trend formation from the current levels. Since the prices are in a range, hence the breaking of either side of the support or resistance will lead to a breakout in either direction. Support of the stock is placed at $0.005, and the resistance is plotted at $0.010.

Improving financials, along with changing environmental regulations, and declining stock prices, refrain from reflecting the improving fundamentals in the prices. Hence, we give the rating of ‘Avoid’ to the stock at the closing price of $0.007, unchanged, as of 17^th August 2021.

Daily Technical Chart – ADX

Source: REFINITIV

Australian Bauxite Limited (ASX: ABX)

ABX is an Australia based company, engaged in the exploration, development, and production of bauxite resources in Australia. It holds interests in 10 bauxite tenements located in New South Wales, Queensland, and Tasmania; and the Bald Hill bauxite mine project at Campbell Town in northern Tasmania. The company was incorporated in 2009 and is based in Sydney, Australia. The market capitalization stood at $21.93 million at $0.120 per share

Financial & Operational Highlights –  Recently the company released its Quarterly Activities report stating the positive outcome from its projects in Tasmania, in terms of Rare Earth Elements. The Alcore project, which is owned up to 87% by the ABX, achieved a milestone using a proprietary technology with the single-step production of aluminium fluoride (AIF3) comparable with the commercial one. On the financial front, the company did not receive any cash receipts from the customers in the past six months ending on 30^th June 2021. The cash balance for the period ending on 30^th June 2021 stood at $3.4 million, increased from $0.93 million for 31^st March 2021.  

Technical Analysis- The stock showed a gradual downtrend and printed the recent low of $0.070 and recovered slightly from there.  The relative strength index is at 59.344, which is heading towards the upper end of the zone, indicating some more strength left with the stock to drive it upwards, to a certain level. The 21 days simple moving average is hovering below the stock price at $0.11, which implies the further upside movement of the stock from current levels. For the prices to get back into the downward trend, the support of $0.095 should be held firmly. The resistance of the stock is placed at $0.150.

Due to a lack of operating revenues, exploration risks and environmental regulations, and declining stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $0.120, as of 17^th August 2021

Daily Technical Chart – ABX

Source: REFINITIV

Cann Group Limited - (ASX: CAN)

CAN is engaged in the research and development, cultivation and production, manufacturing, clinical evaluation, processing, packaging, and distribution and supply of medicinal cannabis for various diseases and medical conditions in Australia. The company was incorporated in 2014 and is based in Bundoora, Australia, with a current market capitalization is $91.62 million, with the current price of $0.305 per share.

Financial & Operational Highlights – on 13^th Aug 21, the company announced that is moving in a positive direction in terms of securing Australian approval for a Schedule 3(S3)  over the counter only product based on Cann’s proprietary Gelpell microsphere technology. Along with this, the company shared the updates on the terminations of collaboration arrangements with Emyria Limited (ASX: EMD) for the planned registration of  Schedule 3 (S3) medicine CBD product. On the financial front, the company received cash receipts of $0.57 million for Q4FY21 ending June 30, 2021 as compared to receipts of $0.62 milllion in the preceding quarter. For the full-year FY21, it had posted cash receipts of $1.38 million. The cash balance was decreased considerably for the period ending on 30^th June 2021 to $3.15 million from $16.39 million in Q3FY21.

Technical Analysis- The stock was in a downward trend after printing a recent high of $0.915 and entered into a consolidation phase. The relative strength index is at 41.142, which is in the middle range of the band, implying no clear trend formation on either side from current levels. The 21 days simple moving average is placed in tandem with the stock price at $0.318, indicating a sideways movement from the current level, giving some more stability to the prices. The support is placed at $0.275, from where we can witness bargain hunting, whereas the resistance is placed at $0.405 levels. Breaking either side of the range will give a clear picture of the trend formation. 

Considering the niche segment, progression in the Cann’s proprietary Gelpell microsphere technology, recent progress on the products developments and consolidating stock prices, gives the investor a comfort to accumulate at current levels. Therefore, we suggest 'Speculative Buy’ on the stock at the closing price of $0.305, up by ~3.389%, as of 17^th August 2021.

Daily Technical Chart – CAN

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 any previous holdings. Investors can consider exiting from 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 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 the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

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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