Sibanye-Stillwater follows a number of broader correlations. Platinum, palladium, gold, gold miners, the SA40. But until now nobody has mentioned that--because of its earnings misses lately-- perhaps the market is pricing in SSW's overextended battery metals M&A strategy. Will they ever make money on their new lithium acquisitions? Is SSW even making money in its catalytic converter recycling segment? It is the largest such company in the world, so it's worth asking. In the short term macro, global electric vehicle production is going to slow; I don't see how SSW will profit from this in the near term.
Now to the technicals of my bearish bet. Breakdown from a Rising Wedge has formed into a Head & Shoulders with the second shoulder rejecting back under the 200 Exponential Moving Average after a notable increase in selling volume. Panning out on the longer term, this is a rejection from previous support of the topping structure. I do not believe that this is a breakout from an Inverse H&S nor a base breakout + retest move. I believe SSW has topped and will continue to move lower.
Now to the technicals of my bearish bet. Breakdown from a Rising Wedge has formed into a Head & Shoulders with the second shoulder rejecting back under the 200 Exponential Moving Average after a notable increase in selling volume. Panning out on the longer term, this is a rejection from previous support of the topping structure. I do not believe that this is a breakout from an Inverse H&S nor a base breakout + retest move. I believe SSW has topped and will continue to move lower.
Comment:
I would also like to mention that I noticed a Bear Flag on the monthly candlestick chart. The top wick of the most recent monthly candle for December is from the top of the head to the end of the second shoulder on the H&S pattern that I highlighted. If you pull a Fibonacci Retracement from the all time high to the 2020 lows, this wick on the December candle sells off exactly to the .5 level. Because the December candle closed right at the .5 level, I am farely certain that we will look back on it as a rejection candle.
Trade active
Comment:
Damn, that candle really screws with my H&S thesis.
Trade closed manually:
Todays candle invalidates the H&S