AVZ Minerals Limited (ASX: AVZ)
It is mineral exploration and development company having Manono Lithium and Tin Project as its projects. Its market capitalization as of 15th December 2021 stood at AUD 2.36 billion.
Financial & Operational Updates – On 10th December 2021, it completed its placement of AUD 75 million, of which 85% through global institutions and rest from sophisticated shareholders. For the same reason it remained on a trading halt for 8-9th December 2021. On 3rd December 2021, it entered into an At-the-Market Subscription Agreement (ATM) with Acuity Capital, where AVZ will get a standby capital of AUD 50 million for the upcoming 27 months.
On 30th November 2021, it extended the date of Transaction Implementation Agreement (TIA) with Suzhou CATH Energy Technologies to 28th February 2022. As per its Quarterly Reports released on 29th October 2021, it closed its quarter (1QFY22) with nil cash receipts and a cash balance of ~AUD 10.03 million at the end of 30th September 2021 versus ~AUD 2.48 million at the end of 30th June 2021. On 26th November 2021, to develop sustainable battery value chain in DRC-Africa, it has intended to join the Battery Council. As per the Annual Report, its revenue from ordinary activities was recorded as ~AUD 45k for FY21 versus ~AUD 217k in FY20. Moreover, it reported total comprehensive losses of ~AUD 13.11 million in FY21 versus ~AUD 4.19 million in PcP.
Technical Analysis: On the weekly chart, AVZ prices are sustaining above the horizontal trend line support and taking support of the same. Moreover, the prices are trading above the trend-following indicators 21-period SMA and 50-period SMA, which may act as a support level for the stock. However, the momentum oscillator RSI (14-period) is trading near an overbought zone at (~82.58 level), which indicates the possibility of rebound in the stock from the current levels The crucial support level for the stock is placed at AUD 0.605, while the key resistance is at AUD 0.785.
A ‘Watch’ stance is suggested after considering the company’s substantial net losses and current high price levels. The stock was analyzed as per the closing price of AUD 0.71 per share, down by ~1.389%, as of 15th December 2021.
Weekly Technical Chart – AVZ
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 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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