Company Overview: Core Lithium Limited (ASX: CXO) is involved in the exploration of copper, gold, iron, silver, uranium, lead, and zinc deposits, as well as the commercialization of lithium and various metal deposits. This Report covers the Price Action, Technical Indicators Analysis along with the Support Levels, Resistance Levels, and Recommendation on this stock.

Recent Updates:

24 July-CXO published its quarterly activities report for the quarter ended 30 June 2023: 

• Spodumene production 14,685t (18,274t for FY23) at a C1 unit cost of AUD 902/t (AUD 1,230/t for FY23).
• Maiden 5,500t spodumene concentrate shipment in April and second 13,100t shipment in early July.
• AUD 45-AUD 50mn approved for BP33 underground mine early works.
• Cash balance as of 30 June 2023 of $152.7 million and no debt
• Guidance for FY24 for spodumene sales is 90,000 to 100,000 tonnes and spodumene production is 80,000 to 90,000 tonnes (this is lower than study estimates due mainly to lower recoveries, mine plan adjustments and mining rates), at a C1 cost of AUD 1,165 to AUD 1,250 per tonne.
• For FY25, CXO expects monthly mining and processing rates to be above FY24 levels; however, overall production in FY25 is expected to be below FY24.

Technical Analysis:

CXO’s price recently broke a crucial support level of AUD 0.725 with the support of volumes, indicating the possibility of a sideways to negative movement in the sock prices. Moreover, the current market price (CMP) is below the 21-period and the 50-period SMA, supporting a negative bias. The RSI 14-period is also moving southward and trading around the oversold zone. Important support for the stock is AUD 0.545, while critical resistance is AUD 0.725.

Weekly Technical Chart – CXO

Considering the stock's current price broke a crucial support level accompanied by the volumes and technical indicators analysis, a 'Watch' recommendation is given on the stock. The stock was analysed as per the closing price of AUD 0.640 per share as on 31 July 2023, down by 3.03%. Core Lithium Limited (ASX: CXO) was last covered in a report dated '18 April 2023'.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest, taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: Investment decision should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report.

Note 3: Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

The reference date for all price data, currency, technical indicators, support, and resistance levels is July 31, 2023. The reference data in this report has been partly sourced from REFINITIV.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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, prices are currently in a bullish trend (Vice – Versa).

The Red colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Orange/ 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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