05. August 2021 | 12:45 CET
TUI, GSP Resource, NEL - The volcano starts to smoke!
Chart analysis is a popular tool among traders and investors to optimize trading in securities or derivatives. The goal is to forecast future price developments based on charting techniques. However, there is a need to remember that under the assumption of efficient market theory, a chart already contains all the available information. Unfortunately, there are as big misunderstandings in chart interpretation as in fundamental analysis. In charts, formations may or may not indicate a breakout, whereas fundamental information has historical and future significance. In all assumptions, we naturally assume that the stock market is always right, meaning that the current price reflects the Company's value at any point in time. But that does not make the decision any easier!
time to read:
ISIN: TUI AG NA O.N. | DE000TUAG000 , GSP RESOURCE CORP. | CA36249G1090 , NEL ASA NK-_20 | NO0010081235
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
TUI - The rocky road to profitability
The German vacation bookings are probably well in the bag now - time to draw a line under the 2021 booking season at travel provider TUI. What has not been earned now will likely no longer be earned, keeping in mind the pandemic prospects of the upcoming fall. It can probably be expected that incidence numbers will go through the roof again due to travelers returning home, and borders will close again.
TUI is currently trying to leverage synergies on all fronts to squeeze its high-cost burden. The tour operator is, first of all, consolidating its airlines. That means that the five airlines from Germany, the UK, Belgium, the Netherlands and Sweden, with a total of 140 aircraft, will in the future be run by a single management team. Key functions will be bundled in joint competence centers, but the familiar brands will be retained.
The reorganization of the airline management is part of a larger restructuring of the entire Group. The Company has run into serious difficulties due to the pandemic, and the tour operator has had to be bailed out several times with state aid. In total, loan commitments from the German government and some private banks amount to EUR 4.8 billion.
The TUI share is currently feeling the full impact of the summer slump. Travel is no longer the primary focus, as the acute backlog has already been booked. Now it has to be seen whether TUI can cope with the pandemic and its additional costs. With the current level of debt, the share is probably still a bit too high with a capitalization of over EUR 4 billion. Moreover, the chart is battered - therefore, continue to observe only!
GSP Resource - Alwin Mine should start soon
The chart is different for GSP Resource, a Canadian explorer that focuses exclusively on southwestern British Columbia. The share price rose to CAD 0.50 in June, then a successful capital increase at CAD 0.35 was made. Due to smaller releases, it recently decreased to CAD 0.23, which was also the low of April 2021. When the drilling data is published soon, it should go up again briskly, according to the chart.
The Company holds an option to acquire 100% of the Alwin rights close to major Teck Resources. The property is highly interesting for its location alone, as there is plenty of copper, gold and silver historically mined. GSP's portfolio also includes the Olivine Mountain project, 600 kilometers away.
Teck Resources is a copper specialist and has been mining from the Highland Valley for many years. With GSP Resource having already drilled grades of 1.29% copper equivalent over a distance of 14.1m in initial drill samples and plans to explore further in 2021, the next set of results should provide even more indication of the property's recoverability. The historic underground mine, laid out over a length and depth of 500 meters by 300 meters, was produced from five major sub-vertical zones from 1916 to 1981. The new drilling program has commenced in early June, with GSP Resource expecting results by August at the latest.
Each new discovery in the rare metal copper is usually acknowledged with significant price premiums. The current market capitalization is only CAD 4.5 million. Please call up the chart again because, in our opinion, a clear doubler is lurking here. And for the neighbor Teck Resources, a takeover would be manageable from the cash flow of a week's production.
Nel ASA - The stock market darling goes under the wheels
Even before the half-year figures, Nel ASA is getting down to business. This time, investors have learned from historical price trends and are selling with a falling trend even before the numbers. Reason: In February 2021, the global automotive industry placed the setting wheel on battery technology, so the decision for e-mobility has fallen.
It was, therefore, only a matter of time before the sell-off in hydrogen stocks began. For many months, investors were still hoping for groundbreaking order announcements. In vain! Nel has now fallen through all supports and is picking up more and more speed to the downside. We had pointed out the precarious technical situation in our last articles. In addition, there is the astronomical valuation of most stocks with sales ratios beyond good and evil.
And then there are the critical analyst voices: In the run-up to the figures, experts from the Norwegian SpareBank have spoken out and recommend selling the shares. According to the current update, SpareBank maintains its sell recommendation and price target of NOK 8.50 (EUR 0.81). That is also precisely where an important chart mark and the final starting point of the subsequent quadruple from March 2020 is. With yesterday's move, the chart has now built a shoulder-head-shoulder formation. Nel's shareholders need strong nerves now.
Charting is often unfairly referred to as reading coffee grounds. The signals have worked well for the three companies described. TUI and Nel are still battered; therefore, one should implement the buy signals at GSP Resource.