Orica Limited (ASX: ORI)

ORI is an Australian company engaged in manufacturing and distribution of commercial blasting systems, support systems for mining, tunneling and infrastructure markets, and various chemical products and services. The company’s operating segments includes Australia Pacific & Asia, North America, Europe, Middle East & Africa, Latin America. Its market capitalization stood at AUD 6.25 billion as of 28^th October 2021.

Operational and other Financial Updates: On 18^th October 2021 and 1^st October 2021, Australian Super Pty Ltd and Cooper Investors Pty Ltd increased their substantial shareholding to ~14.34% and ~7.145%, respectively. On 14^th October 2021, it had announced an updated ambition of achieving net zero carbon emission by 2050. As per the announcement on 29^th September 2021, various significant items such as non-core sale of land, goodwill impairment related to EMEA restructuring costs are expected to reduce the company’s statutory Net Profit after tax to the extent $345-370 million in 2HFY21. In H1FY21, ORI witnessed reduction slight uptick in cash balance to ~AUD 988.8 million as compared to ~AUD 920.5 million as of September 2021.

Technical Analysis: ORI has given ~30.71% and ~19.37% returns in one month and three months respectively. On the daily chart, after reaching high at AUD 15.70, prices have reversed after testing its upward trend line resistance. Moreover, the leading indicator RSI (14-period) is trading in an overbought zone and currently at ~73.717 level, indicating a possibility of downside correction in short-term from current levels.

Looking at its significant items mentioned above impacting its profitability in upcoming 2HFY21 and its RSI trading in an overbought zone on technical front, we suggest Investors to book profit on the stock and therefore a “Sell” stance is suggested. The stock was analysed at the current price of AUD 15.310 per share, 11:48 AM (GMT+10), Sydney, Eastern Australia, as of 28^th October 2021.

Daily Technical Chart – ORI

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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.