Company Overview:

Vulcan Energy Resources Limited (ASX: VUL) is involved in the exploration and production of geothermal energy and lithium in Germany, Other European (France, Norway, and Italy), and Australia. This Report covers the Price Action, Technical Indicators Analysis along with the Support Levels and Resistance Levels on this stock.

Recent Updates:

On 4 May 2023, VUL successfully completed underwritten placement and raised EUR 66 million (AUD 109 million) by issuing 21.4 million new, fully paid ordinary shares at an offer price of AUD 5.10 per share. The proceeds from the placement shall be used to progress its integrated renewable energy and lithium project execution strategy. VUL has plans to order long lead CAPEX items for Phase One Lithium Plant, acquisition of land for Lithium Extraction Plant, conduct 3D Seismic acquisition for Phase 2 development, and fulfil general working capital requirement to support on-the-ground execution, and transaction costs associated with the Placement.

However, this lithium stock was crashing on Friday (5 May 2023) as placement price reflected a significant discount on the share price, from where it was trading prior to the trading halt. Notwithstanding, the Company’s CEO, Dr Francis Wedin commented that the “next 12 months will be transformative for the Company”.

VUL’s Technical Analysis:

The stock price of VUL is confronting a short-term downward sloping trendline; furthermore, it broke below the nearest low with a Break-away gap, indicating a negative bias. Nonetheless, as the stock is trading close to significant support, which is the lowest level since June 2022, a rebound is anticipated from there. In addition, although the RSI (14-period) is moving south, it is also trading near the oversold region, supporting the previously mentioned recommendation. The stock is trading below its 21-period simple moving average, which may act as resistance. Important stock support is located at AUD 4.760, while key resistance is positioned at AUD 5.660.

Daily Technical Chart – VUL

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. Vulcan Energy Resources Limited (ASX: VUL) was last covered in a report dated '03 March 2023'.

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 Blue 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.