I think it was STMTS that posted a good price chart analysis...

I think it was STMTS that posted a good price chart analysis earlier this week. Thought I would add to that analysis with the following (just practising, I'm still a T/A novice), plus some comments about the fundamentals (I never just look at charts):



I've started with a very similar analysis of the price chart, showing CEY's recent price movement history and the pattern of re-traces to a new peak from the previous decline, in each of the last 3 instances at least 50% re-trace can be observed. Continuing the same pattern for the current cycle and using a minimum 50% re-trace would suggest the SP will peak in the current cycle somewhere above the 220's - which happens to coincide with the previous support line at around 230, which would now provide the resistance level.



If we now look at the stochastic and RSI charts, both indicate the SP is in or just to break out of oversold territory.



The MACD & oscillator show signals confirming those provided by the stochastic & RSI.

So to me the technicals all show CEY is oversold at recent levels and there is some upside in the current cycle.

On the fundamental side:

1. CEY has just produced excellent 1/2 year results with a strong balance sheet and the only negatives are its hedging losses and impending weaker export contract prices, although these may be set at around US$75 which would still be profitable for CEY, although of course not at levels that would have been expected last year.

2. CEY is strong in thermal coal which will remain in demand as opposed to other types of coal, so it is well positioned in terms demand for its product.

3. The company's fundamentals are sound and imo the extent of the recent sell-off has been an over-reaction - sanity will return and with it the SP will improve. On an EPS basis of 8x earnings (just my valuation) would give a fair value price of at least 192.

4. The market will continue to be volatile and in particular the lead from the US in the coming weeks will be important to everyone in the market, however the XJO has recently shown some resiliency against some of the DOW's recent falls.

5. The market is quick to price in bad news across the board. Imo I dont think its sufficiently pricing in any premium for stocks with low risk profiles such as CEY.

All in all, as per recent CEY price cycles, the SP will re-trace to a 220+ level, and may take as long as 4-6 weeks to do so, but how quick and how high will to a significant extent depend on developments in the broader market.

Anyway, that's my 2 bob's worth, for what that's worth (probably 90% less than previously, like everything else in the market).