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Vulcan Energy Resources Limited
VUL Details
Vulcan Energy Resources Limited (ASX: VUL) is engaged in energy metals exploration in Europe. The company plans to decarbonize the transition to electric mobility, through the Zero Carbon Lithium™ business for electric vehicle batteries, and its renewable energy business.
Results Performance (Half-Year Ended 31 December 2020 – H1FY21)
Key Data (Source: Company Reports)
Fourth Quarter Activities Report (Q4FY21) – Released on 29 July 2021
Recent Update:
Key Risks:
The company is exposed to a variety of financial risks such as market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk.
Outlook:
On 3 August 2020, the company stated that Lithium chloride is indicating a positive sign from Upper Rhine Valley geothermal brine during a series of successful bench-scale Direct Lithium Extraction (DLE) tests commissioned by Vulcan. Two different, pre-selected DLE adsorbents were examined and, in both cases, the lithium recovery rate exceeded 90% on the first pass.
Technical Analysis
Daily Chart
Source: REFINITIV, Note: The purple color line in the chart shows 21-period SMA.
On a daily chart, VUL price witnessed a sharp bull rally from the low of AUD 8.65 made on 20 July 2021 and tested almost 7 months high of AUD 13.72 on 06 August 2021. The stock is facing the resistance of its 200% Fibonacci extension level at AUD 13.90 and prices are sustaining below resistance zone. Moreover, the momentum oscillator RSI (14-period) is trading in an overbought zone, indicating a possibility of downside correction from the current level. However, the prices are trading above the trend-following indicators 21-period SMA. An important support level for the stock, is placed at AUD 12.00 while the key resistance level is placed at AUD 14.20.
Stock Recommendation:
The stock increased by ~71.3% in 3 months and ~2,320.2% in 1 year. It has made a 52-week low and high of $0.455 and $14.20, respectively.
Considering the movement in the stock price in the past few months, we give a “Sell” rating on the stock at the current price of A$13.68 per share (Time: 2:03 PM (GMT+10), Sydney, Australia) on 6th August 2021.
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 on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.
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 uptrend may take a pause due to profit booking or selling interest.
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