We saw a continued improvement in many stocks last week, particularly with the leading stocks as they were recovering from pullbacks and profit taking. While there was nothing exciting in this observation, it was further evidence that the we are still within broad uptrends.
However, the junior end of the market headed the opposite direction to the leaders with trading patterns that we see almost every June. Prices drift lower on limited volume as we approach the close of the fiscal year. There is no point into getting emotional about the weakness in so many prices. In thin markets any bad news will be dealt with more severely and capital raisings will struggle to get away. So it is every year at this time.
The Sentiment Oscillator has weakened off over the last week due to the larger number of junior stocks represented.
Again, this is to be expected.
The battery input sector is giving mixed messages at the moment. Whereas there is a good argument for saying that the lithium sector has peaked and many stocks are looking sicker, we are seeking some new-found strength in some of the leading lithium stocks. Lithium is still a thematic that is resonating with institutional money.
The same cannot be said of cobalt stocks though. They have been very disappointing over the last month or more, notwithstanding the critical shortage of this metal. It may be that there is not only a shortage of cobalt itself, but there is also a shortage of credible companies that are suitable for institutional portfolios. We are yet to see the big swing into this sector but we are confident it will come.
