Paladin Energy Limited (ASX: PDN)

PDN is a uranium mining, exploration, development and evaluation company. It operates Langer Heinrich mine in Namibia, and other mines in Australia and Canada. It was incorporated in 1993 and holds its market capitalization at AUD 2.47 billion as of 9^th November 2021.

Financial & Operational Updates – As per the Restart Update released on 4^th November 2021, life of mine production target at its Langer Heinrich mine has been increased to 77.4Mb of uranium from the previous target of 76.1Mb. Ore reserves are confirmed at 84.8Mt with an average uranium grade of 448ppm. Project commencement to the first production is slated at 18 months. As per the quarterly activities report, PDN closed the period with nil debt and held a cash balance of USD 40.5 million as of 30^th September 2021. It had reported a total cash expenditure of USD 4.1 million, with the majority of costs related to corporate expenses and forex movement.  PDN was included in the S&P/ASX 300 Index effective 20^th September 2021. The company plans to hold its AGM on 17^th November 2021.

Technical Analysis: PDN stock prices are trading below the rising trend line resistance zone at AUD 1.04 and continuously facing resistance of the same on the daily chart. However, prices are trading above 21-period SMA and 50-period which may act as a crucial support level for the stock. Moreover, the momentum oscillator RSI (14-period) is trading at ~62.702 level.

After considering notable developments at its Langer Heinrich mine and the ~108.42% return it has given in past three months, we consider it is prudent to liquidate and book profit on PDN. Hence, we recommend “Sell” stance at the current price of AUD 1.00 per share as of 9^th November 2021, 11:50 AM (GMT+10), Sydney, Eastern Australia.

Daily Technical Chart – PDN

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 Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-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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