Liontown Resources Limited
Liontown Resources Limited (ASX: LTR) is an emerging Tier-1 battery minerals producer to become the ESG leader in the growing clean energy market. It controls two lithium deposits in Western Australia and aims to expand the portfolio through organic and inorganic routes.
Albemarle Proposal to Acquire Liontown Resources Limited:
- Recently, Albemarle Corporation (NYSE: ALB) showed its interest in acquiring all outstanding shares in Liontown Resources by way of a scheme of arrangement ("Indicative Proposal") for AUD 2.50 per share in cash.
- Notably, the "Indicative Proposal" was subject to several customary conditions, including due diligence, regulatory approvals, and entry into a jointly acceptable scheme implementation deed.
- Per the board of directors, Albemarle has undervalued Liontown by placing its buyout value at AUD 2.50 per share. Further, the share price does not adequately compensate shareholders for the company's prospects, and thus LTR rejected the "Indicative Proposal". The rejection also supports the positive near-term outlook for existing or new lithium producers. It is reinforced by a prediction of progress in global lithium demand of 5 times by 2030, along with synergies that would benefit Albemarle post-acquisition, given its existing operations in Australia.
- Further, LTR received a revised "Indicative proposal" from Albemarle. This time, the company notified LTR that it now has an appropriate interest in ~4.3% of Liontown shares, compared to the previous shareholding of ~2.2% of Liontown's issued shares.
- To conclude, LTR has rejected the Albemarle proposal. Therefore, shareholders do not need to take any action at this time.
Other Recent Update:
- Olympio Metals Limited (ASX: OLY) announced that it has agreed to farm into Olympio’s Mulline and Mulwarrie lithium projects with Liontown Resources Limited (ASX: LTR).
- LTR is expected to complete 1,100 soil samples across the projects before progressing towards Stage 1 earn-in. Further, the two-state farm-in agreement with Stage 1 is to take LTR to 51% interest within one year.
- Going forward, Olympio could request to end the farm-in and form a joint venture (JV) where LTR could fund 51% and Olympio around 49%.
Technical Analysis:
LTR’s prices recently broke a crucial resistance level of AUD 2.22, and post that witnessed a sharp upside movement. Now the prices are trading around the 52-week high and forming a negative divergence compared to the RSI (14-period), indicating the possibility of a downside correction in the stock prices. However, the trend following indicators 21-period and 50-period SMAs are below the current market price, supporting a positive bias.
Pure Hydrogen Corporation Limited
Pure Hydrogen Corporation Limited (ASX: PH2) is engaged in the gas and hydrogen business.
Technical Analysis:
PH2’s prices are trading in the lower highs and lower lows formation and facing the resistance of a downward sloping trend line, indicating the possibility of a sideways to downside movement. The leading indicator RSI (14-period) is below the midpoint with a reading of 43.24, and the 50-period and 21-period SMAs are above the current market price, indicating a negative bias.
Althea Group Holdings Limited
Althea Group Holdings Limited (ASX: AGH) is engaged in manufacturing, selling, and distributing cannabis-based medicines and recreational cannabis products.
Technical Analysis:
AGH’s prices are consolidating above a downward sloping breakout level and are expected to continue the same for the short term. The leading indicator RSI (14-period) is below the midpoint with a reading of 46.18, and the 50-period SMA is above the current market price, indicating a negative bias.
Hexagon Energy Materials Limited
Hexagon Energy Materials Ltd (ASX: HXG) specializes in the discovery and development of initiatives relating to clean energy and energy materials.
Technical Analysis:
HXG’s prices broke a crucial support level of AUD 0.013 by the downside and are sustaining below that, indicating the possibility of a sideways to downside movement. The leading indicator RSI (14-period) is below the midpoint with a reading of 44.89, and the 50-period SMA is above the current market price, indicating a negative bias.
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.
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 black 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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