Aeon Metals Limited (ASX: AML)

AML is a mining company with tenements in Copper, Cobalt, Gold, Lead, Zinc, Molybdenum, and Silver. It caters to customers in Australia. Some of its notable projects include the Walford Creek copper-cobalt project and 7B Copper/Gold Project, and Farsayth Project.

Business and H1FY22 Financial Update – Announced on 29 March 2022, AML released the Walford Creek 2022 exploration strategy. Drilling contractors were engaged in providing two multi-purpose drill rigs for the 2022 exploration program. Announced on 16 March 2022, Walford Creek Mineral Resource Estimates for Vardy and Marley were updated to incorporate geotechnical and metallurgical drilling completed in 2021. During H1FY22, the company raised $9.5 million in an equity placement to existing and new sophisticated and professional investors. As of 31 December 2021, the company held a cash balance of $2.72 million.

Technical Analysis: AML prices surged significantly from lower levels after the stock price broke the downward sloping trend line by upside. However, prices are now facing the resistance of 21-period SMA on a monthly chart that indicates profit booking might occur in the stock in the coming period. RSI (14-period) is hovering at ~44 on a monthly chart that indicates prices are overall trading in a weak momentum. Immediate support levels are AUD 0.057 and AUD 0.049, while primary resistance levels are AUD 0.082 and AUD 0.108.

Stock Recommendation: The stock of AML gave a positive return of ~42.857% in the past one month. The stock is currently trading lower than the 52-weeks average price level band of $0.036 - $0.095. Given the nil revenue generation, the returns the scrip has given, relatively extended development phase, considerable competition, current trading levels, and key risks associated with the business, we suggest investors book profits and give a “Sell” recommendation on the stock at the closing market price of $0.070, up by ~1.449%, as of 21 April 2022.

Daily Technical Chart – AML

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should depend 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 rise, 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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