Jervois Mining Ltd. 

Jervois Mining Ltd (ASX: JRV) is an Australian mining and exploration company. The Company’s project portfolio includes the Idaho cobalt project, Kilembe project, Nico Young project and Bujagali project.

As per our previous recommendation on JRV on May 24, 2021, we recommended a ‘Buy’ rating on the stock at AUD 0.509 level from the technical analysis standpoint for 2-4 weeks duration. However, considering the recent price action, technical indicators, resistance level analysis, and double-digit returns; we are of the view that it is prudent to book profits at the current levels. Hence, we give a 'Sell' rating on the stock at the current price of AUD 0.590 as on May 31, 2021, 02.28 PM (GMT+10), Sydney, Eastern Australia. The summary of our 'Sell' rating and price movement since the previous recommendation on JRV is provided as below:

Price action and technical indicator analysis (on the Weekly chart):

JRV’s prices moved up by ~17.87 percent from the recommended entry price and made a high of AUD 0.600 on May 28, 2021. Recently prices witnessed a sharp upside movement and now are facing stiff resistance at AUD 0.620. A downside movement from the current levels may start a correction phase in the stock that might drive the prices to the lower levels.

On the weekly chart, RSI (14-period) is trading near an overbought zone at ~67.73 level, indicating a possibility of reversal. RSI is also forming a negative divergence with the price, further supporting a downward stance. However, prices are still sustaining above 21-period, acting as the support for the stock.

Conclusion:

Based on the above-mentioned price action, RSI (14-period), and resistance level analysis, we recommend a ‘Sell’ rating on JRV and suggest investors to book profit at the current price of AUD 0.590 (as on May 31, 2021, 02.28 PM (GMT+10), Sydney, Eastern Australia. 

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and 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 risk, currency risks, and social and political instability risks etc.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

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.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume and we consider stocks with greater than or equal to 200,000 volumes as more liquid. Liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is May 31, 2021, 02.28 PM (GMT+10), Sydney, Eastern Australia 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

AUD: Australian Dollar

RSI: Relative Strength Index 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se.  Past performance is neither an indicator nor a guarantee of future performance.

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