Liontown Resources Limited (ASX: LTR)

Liontown Resources Limited (ASX: LTR) is an emerging Tier-1 battery minerals producer to become the ESG leader in the growing clean energy market. It controls two lithium deposits in Western Australia and aims to expand the portfolio through organic and inorganic routes. The current market capitalization as of 28 February 2023 stood at AUD 2.89 billion.

Recent News: Through the ‘Investor Presentation BMO Conference’, the company has once again cleared its strategy: (i) Kathleen Valley Full Potential: Aiming to become a globally significant sustainable supplier of spodumene. (ii) Downstream Expansion: The focus is to develop integrated Australian operations to capitalize on higher margins and create new supply chains. (iii) Liontown Full Potential: Grow portfolio through organic and inorganic routes and exposure to the circular economy.

On 3 February 2023, the company announced that the first blast fired successfully at the Mt Mann Open Pit, indicating the commencement of mining operations as planned at the Kathleen Valley Lithium Project in Western Australia.

December 2022 Quarterly Activities & Cashflow Report: Among other details, the company mentioned that it executed Purchase Power Agreement (PPA) and fast approval for an AUD25 million guarantee facility from Export Finance Australia. Further, it successfully recruited corporate, project and mining team members per the project requirements. As of 31 December 2022, the company had Cash at the bank of AUD384 million and an undrawn Ford debt facility of AUD300 million.

Technical Analysis: LTR stock prices took the support from the crucial support zone and recently broke the downward sloping trendline by an upside, indicating a possible recovery in the coming days. Moreover, the RSI-14 period (~44.881) is recovering from the oversold zone, suggesting a rebound in the stock. LTR stock prices may face resistance near AUD 1.600 & AUD 1.700 levels, whereas it might struggle to test the AUD 1.200 & AUD 1.120 support levels.

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.

The stock was analysed at the closing price of AUD 1.36 per share, up 3.422% as of 28 February 2023.

Daily Technical Chart – LTR

Markets are trading in a highly volatile zone currently due to certain macro-economic 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.

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