No DNA, Just South African.The stock is unfolding in what seems to be an inverse H&S pattern. A channel breakout gave confirmation and the neckline break will give a second confirmation.
AALL trade ideas
Anglo American PLC Stock Price & AnalysisWithin a 100K Account Balance the split on Trade & Risk Management = 1/10% - 1/20% margin as an Execution Range, to set up an Order Entry and select a per Trade on Average, to avoid any drawdown hit regarding to Stop Loss & to execute Risk on Management Specifics. Trail Stop efforts are a Focus of Attention to the set up in general when Volatile-Price-Action is involved, mainly because of the usage of an Intraday-Scalp-Position tool on behalf on the Trade Plan in general
Key indicators on Trade Set Up in general;
1. Push Set Up
2. Range Set Up
3. Break & Retest Set Up
Active Sessions on Relevant Range & Elemented Probabilities;
* Asian(Ranging) - London(Upwards) - NYC(Downwards)
* Weekend Crypto Session
- Income statement in USD
Year on year Anglo American PLC's revenues fell -12.72% from 35.12bn to 30.65bn. This along
with an increase in the cost of goods sold expense has contributed to a reduction in net
income from 4.51bn to 283.00m, a -93.73% decrease
- Cash flow in USD
In 2023, cash reserves at Anglo American PLC fell by 2.33bn. However, the company earned
6.50bn from its operations for a Cash Flow Margin of 21.19%. In addition the company used
5.56bn on investing activities and also paid 3.22bn in financing cash flows
- Balance sheet in USD
Anglo American PLC has a Debt to Total Capital ratio of 38.63%, a lower figure than the
previous year's 57.76%
- Growth rates in USD
Year on year, both dividends per share and earnings per share excluding extraordinary items
growth dropped -22.58% and -93.70%, respectively. Additionally when measured on a five year
annualized basis, both dividend per share and earnings per share growth ranked in-line with
the industry average relative to its peers
Conclusion | Trade Plan Execution & Risk Management on Demand;
Anglo American PLC Stock Price & Analysis: Overall Consensus | Sell
Our opinion on the current state of ANGLO(AGL)With Anglo American (AGL), the risk normally associated with commodity stocks is mitigated in two ways. Firstly, the company has diversity of different minerals which reduces the impact of any one mineral entering a bear trend. Secondly, the traditional mechanism to avoid risk is to have a very strong balance sheet with plenty of headroom. That way, if things turn bad, you can ride out the storm. Anglo has such a balance sheet.
Anglo describes itself as a globally diversified mining company with a portfolio of world-class mining operations and undeveloped resources. It is true that commodity prices as a group tend to move in trends, and since the beginning of 2016, that trend has been steadily upward until the coronavirus caused markets to fall into a new downward trend in March 2020. The upward trend has now resumed, with a strong recovery already taking place.
An Anglo project is Quellaveco in Peru which is a massive copper mine in which Anglo owns 60% of. It will have a very rapid payback period now that it has begun producing. It is costing $5,6bn to build which should be recovered in about 4 years - and then the mine has a life of 30 years. We believe that the boom in commodity prices is continuing, and that COVID-19 is substantially behind us - commodity prices will be driven on by the economic expansion which began in America and spread to Europe and the East. Of course, the conflict in Ukraine is pushing commodity prices up, especially precious metals, because of the heavy sanctions on Russia.
So, if you are looking for an investment which is likely to be more exciting than buying one of the big banks or property REITs, and which will benefit directly from the growth in the world economy, you could do worse than to consider Anglo American. One of the factors holding the company back has been the poor availability of Transnet’s rail service, especially at Kumba. The company plans to get 100% of its energy needs from renewables in South Africa by 2023.
In its results for the six months to 30th June 2024 the company reported earnings before interest taxation depreciation and amortisation (EBITDA) of FWB:5BN - with reduced costs offsetting a 10% drop in its basket of commodity prices. Iron and copper contributed $3,5bn of the EBITDA. Debt was $11,1bn and headline earnings fell to $0.42 per share (HEPS) from $1.35 (US) in the previous period. The company, "...delivered steady volumes and a 4% improvement in unit costs, while still facing weak cyclical markets for PGMs and diamonds."
We recommended that you wait for the share to break up through its long-term downward trendline (connecting the peak in January 2023 with that of December 2023). That happened on 2nd April 2024 at a price of 47926c. The share then rose to 63480c - mainly because of an offer first announced on 13th May 2024 from BHP to buy Anglo after unbundling Kumba and Amplats. In terms of the third iteration of the offer, Anglo shareholders would get 0,8860 BHP shares for every share of Anglo that they held which would result in Anglo shareholders owning 17,8% of BHP. Anglo announced that it had rejected this third BHP offer, but opened the door for negotiations. On Wednesday 29th May 2024, BHP withdrew its offer and the downward trend in Anglo shares continued as hopes of a takeover faded. Anglo remains a commodity share linked to the international prices of various commodities. Its restructuring will leave it with Kumba and its manganese interest in South Africa.
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) mitigates the typical risk associated with commodity stocks in two ways. Firstly, the company has a diverse portfolio of different minerals, reducing the impact of any one mineral entering a bear trend. Secondly, it maintains a very strong balance sheet with plenty of headroom, allowing it to ride out economic downturns. Anglo describes itself as a globally diversified mining company with a portfolio of world-class mining operations and undeveloped resources.
Commodity prices tend to move in trends, and since the beginning of 2016, the trend has been steadily upward until the coronavirus pandemic caused markets to fall into a new downward trend in March 2020. The upward trend has now resumed, with a strong recovery already taking place. One of Anglo's key projects is Quellaveco in Peru, a massive copper mine in which Anglo owns 60%. This project will have a very rapid payback period now that it has begun producing. It is costing $5.6bn to build, which should be recovered in about four years, and the mine has a life of 30 years.
We believe that the boom in commodity prices is continuing, and that COVID-19 is substantially behind us. Commodity prices will be driven by the economic expansion that began in America and spread to Europe and the East. Additionally, the conflict in Ukraine is pushing commodity prices up, especially precious metals, due to heavy sanctions on Russia.
If you are looking for an investment that is likely to be more exciting than buying one of the big banks or property REITs, and which will benefit directly from the growth in the world economy, you could consider Anglo American. One of the factors holding the company back has been the poor availability of Transnet’s rail service, especially at Kumba. The company plans to get 100% of its energy needs from renewables in South Africa by 2023.
Anglo’s share price went up six-fold in under three years and rose to R425 before the coronavirus epidemic. It fell to R210 and then recovered to over R800 before the problems at Los Broncos. The current fall in the share price is also a result of the drop in commodity prices. It is clear that the company is being impacted by both the increased load shedding and problems with the South African rail service.
In its results for the year to 31st December 2023, the company reported revenue down 13% and earnings per share (EPS) down 94% in US dollars. The company said, "Quellaveco fully ramped up and produced 319,000 tonnes of copper at a unit cost of 111 c/lb. On track to reduce annual costs by c.$1 billion and capex by c.$1.6 billion over 2024–2026. Underlying EBITDA of $10.0 billion, a 31% decrease; 2% volume increase and unit costs held to +4% despite high inflation, more than offset by $5.5 billion revenue impact of PGMs and diamonds at cyclical lows." The company has debt of $10.6bn and is involved in a complete review of all its assets.
Technically, the share appears to have completed a head-and-shoulders formation and broken down through the neckline at R525, setting the stage for further falls. On 11th December 2023, Business Day reported that Anglo had announced capital expenditure cuts of R1.8bn, causing the share price to drop by 13.3%. We recommended waiting for the share to break up through its long-term downward trendline (connecting the peak in January 2023 with that of December 2023). That happened on 2nd April 2024 at a price of 47926c. Since then, the share has risen to 63480c, mainly because of an offer first announced on 13th May 2024 from BHP to buy Anglo after unbundling Kumba and Amplats.
In terms of the third iteration of the offer, Anglo shareholders would get 0.8860 BHP shares for every share of Anglo that they held, which would result in Anglo shareholders owning 17.8% of BHP. Anglo announced that it had rejected this third BHP offer but opened the door for negotiations. On Wednesday, 29th May 2024, BHP withdrew its offer. Our view is that there may be other offers, perhaps from Rio Tinto or Glencore.
BHP Group Takeover Bid for Anglo American PLC: Deadline ApproachThe clock is ticking as we approach the 6pm deadline Friday for Anglo American PLC to respond to BHP Group's takeover bid. This is a significant moment for both companies and the mining industry as a whole. Let's dive into the charts and analyze the current situation.
Daily Timeframe Analysis 📉
Looking at the daily chart, the price of Anglo American PLC has been in a long-term decline. Recently, it touched the supply zone between 64.32 and 66.77. This contact resulted in a strong reaction, indicating a potential reversal or at least significant resistance at these levels. From my perspective, buying this stock right now doesn't seem prudent. If BHP proceeds with the acquisition at these prices, they could face substantial financial challenges.
Weekly Timeframe Insights 📊
Switching to the weekly chart, we observe a different story. There's a demand zone between 40.137 and 45.846. Historically, buyers have stepped in aggressively when prices reached these levels. Should the price decline to this range before Friday, it might present a more attractive entry point for potential buyers. This area could see significant buying pressure, providing a stronger foundation for a potential turnaround.
Key Takeaways 🔍
Daily Chart: Long-term decline, strong reaction at supply zone (64.32-66.77).
Weekly Chart: Potential demand zone (40.137-45.846) where buyers might step in.
While the market's reaction and the final decision of Anglo American PLC remain to be seen, these technical levels provide critical insights for traders and investors alike.
📈💼 Remember, this analysis reflects my personal views and should not be taken as financial advice. Always do your own research before making any investment decisions. Happy trading!
Disclaimer: The views expressed in this article are my personal opinions and should not be considered as financial advice. Please conduct your own research and consult with a financial advisor before making any investment decisions.
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) is a globally diversified mining company that has effectively mitigated the typical risks associated with commodity stocks through strategic diversity in its mineral portfolio and maintaining a robust balance sheet. This diversification helps cushion the impact should any single mineral enter a bear trend, while a strong balance sheet provides the resilience needed to withstand economic downturns.
Historically, commodity prices have shown a tendency to follow distinct trends. Starting from 2016, there was a steady upward trajectory until the COVID-19 pandemic triggered a downturn in March 2020. However, a recovery is evident, and the upward trend has resumed, fueled partly by economic expansions starting in America and spreading to Europe and Asia. Additionally, the conflict in Ukraine has driven up prices, particularly for precious metals, due to heavy sanctions on Russia.
A key project for Anglo American is the Quellaveco mine in Peru, a massive copper venture where Anglo owns a 60% stake. With a construction cost of $5.6 billion, the mine is expected to achieve a rapid payback within approximately four years, thanks to its production potential and a projected 30-year operational lifespan.
Despite these positive aspects, Anglo American has faced challenges, such as unreliable rail services from Transnet, particularly impacting its Kumba operations. The company has ambitious plans to meet 100% of its energy needs from renewable sources in South Africa by 2023. However, the share price has experienced significant volatility; it surged six-fold in under three years pre-pandemic, fell during the pandemic, and has since recovered impressively, although recent commodity price drops have affected it.
For the year ending 31st December 2023, Anglo reported a 13% decrease in revenue and a dramatic 94% drop in earnings per share (EPS) in US dollars. Operational highlights included the full ramp-up of Quellaveco, producing 319,000 tonnes of copper at a cost of 111 cents per pound, and a strategic reduction plan aiming to cut annual costs by approximately $1 billion and capital expenditures by about $1.6 billion over the next three years. Despite these measures, a significant revenue impact from cyclical lows in PGMs and diamonds contributed to a 31% decline in underlying EBITDA.
Recently, Anglo's stock has shown technical signs of further declines after completing a head-and-shoulders pattern and breaking down through the neckline at R525. However, following an acquisition offer from BHP on 13th May 2024, which proposed exchanging 0.8132 BHP shares for each Anglo share, the stock price rallied from 47926c to 63480c. Anglo rejected this second offer from BHP, signaling potential for an even more favorable proposal, possibly from competitors like Rio Tinto or Glencore.
Given these dynamics, Anglo American presents a potentially exciting but volatile investment opportunity, directly benefiting from global economic growth and the strategic management of its diverse mineral portfolio. The future could see significant developments, especially with the ongoing interest from major players in the mining sector.
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) effectively mitigates the typical risks associated with commodity stocks through two main strategies: diverse mineral operations and a strong financial foundation. The company's diversification across different minerals helps buffer against downturns in any single commodity market, while its robust balance sheet provides substantial resilience in turbulent times.
Anglo American positions itself as a global mining leader with a broad portfolio of high-quality mining operations and undeveloped resources. Notably, the general trend for commodity prices has been upward since 2016, except for a downturn triggered by the COVID-19 pandemic in March 2020. Since then, there has been a notable recovery, fueled by economic growth in the U.S., Europe, and Asia. This recovery is reflected in projects like the Quellaveco mine in Peru, a massive copper operation where Anglo owns a 60% stake. With a construction cost of $5.6 billion, the mine is expected to pay back its investment within four years, subsequently providing long-term returns over its 30-year operational life.
The global economic climate, including factors like the Ukraine conflict, has driven commodity prices, particularly precious metals, due to heavy sanctions on Russia. Despite these positive global market trends, Anglo American faces challenges such as unreliable rail services from Transnet, particularly impacting its Kumba operations. Additionally, the company is moving towards sourcing 100% of its energy needs from renewables in South Africa by 2023, aligning with broader environmental objectives.
Financially, Anglo American experienced a decline in its latest annual results, with a 13% drop in revenue and a significant 94% decrease in EPS, as stated in the December 2023 report. This financial pressure is compounded by a $10.6 billion debt load and a comprehensive review of all assets to potentially streamline operations and reduce costs.
From a technical perspective, Anglo's stock had shown signs of a bearish head-and-shoulders pattern, breaking down through the neckline at R525, suggesting potential for further declines. However, the dynamic changed with BHP's acquisition offer, which has significantly influenced the stock's trajectory. Initially, Anglo's shares responded positively to the offer, surging from the breakout point in April 2024. Nevertheless, Anglo rejected BHP's initial proposal, where shareholders would receive 0.7097 BHP shares for each Anglo share post-unbundling of Kumba and Amplats. This decision indicates potential for an improved offer, especially if competitors like Rio Tinto or Glencore enter the fray.
For investors, Anglo American presents a mix of opportunity and risk, characterized by its strategic asset base and current market dynamics. The company's future stock performance may hinge on further developments in the acquisition talks and its ability to manage operational challenges. Investors should closely monitor these aspects, considering both the strategic value of Anglo's diversified portfolio and the external economic factors influencing commodity markets.
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) is well-regarded for its strategic approach to mitigating the typical risks associated with commodity stocks. The company achieves this through two primary means: a diversified portfolio and a robust balance sheet.
**Diversity of Minerals:** Anglo American's portfolio includes a variety of minerals, which spreads the risk and lessens the impact of any single mineral's price fluctuations. This diversification is crucial in stabilizing earnings as different commodities may experience cycles at different times.
**Strong Financial Position:** The second strategy Anglo employs is maintaining a strong balance sheet with significant liquidity, which enables the company to withstand negative market trends. This financial resilience is essential for riding out periods of economic downturn.
Anglo American markets itself as a globally diversified mining company with an impressive array of world-class operations and undeveloped resources. Since the start of 2016, commodity prices generally trended upward until the COVID-19 pandemic triggered a downturn in March 2020. However, the sector has seen a robust recovery post-pandemic, driven by economic expansion in major economies like the United States, Europe, and parts of Asia.
A notable project under Anglo American's belt is the Quellaveco mine in Peru, a significant copper venture where Anglo owns a 60% stake. The project, which cost $5.6 billion to develop, is expected to pay back its investment within approximately four years, with a projected operational lifespan of 30 years thereafter. This mine exemplifies the company's capacity for executing large-scale and profitable projects.
The global economic landscape, including the COVID-19 recovery and geopolitical tensions such as the conflict in Ukraine, continues to influence commodity prices. Precious metals, in particular, have seen price increases due to heavy sanctions on Russia. These factors collectively contribute to a favorable outlook for companies like Anglo American, which are poised to benefit from the ongoing commodity boom.
However, challenges persist. Issues such as unreliable rail service from Transnet, especially impacting operations like Kumba, and increased load shedding have posed significant operational challenges. Despite these hurdles, Anglo American plans to fully transition to renewable energy sources in South Africa by 2023, reflecting its commitment to sustainability.
Financially, Anglo American faced a tough year in 2023, with revenue down 13% and earnings per share (EPS) dropping dramatically by 94% in US dollars. The full ramp-up of Quellaveco was a high point, but it couldn't offset the significant revenue impacts from cyclically low prices in PGMs and diamonds. The company is undergoing a comprehensive review of all its assets to improve financial health further.
Despite these pressures, Anglo American's share price has shown resilience. After declining significantly, it began to recover following an acquisition offer from BHP, which proposes to exchange 0.7097 BHP shares for each Anglo share, post the unbundling of Kumba and Amplats. This offer could potentially increase, especially if competitors like Rio Tinto or Glencore enter the fray.
In conclusion, Anglo American's strategic management of commodity risks, coupled with its robust project pipeline and operational challenges, paints a complex but potentially rewarding picture for investors. As always, potential investors should monitor these developments closely, considering both the opportunities and the risks inherent in the commodity sector.
AGLReading Time: 1 Minute
On Thursday, AGL traded above R500, exceeding the R478 upside target.
At current levels, the share is in a high bullish momentum phase, while also approaching an overbought range.
Traders need to monitor for a deteriorating short term candle structure which could mean that the upside momentum is being lost. Failure to the previous session(s) range highs, would suggest that an ultra short term reversal is underway (possible tactical short/sell setup).
The share is extended versus it's 21-DAY EMA by the most since December 2022. This shows the extent of the short term overbought conditions.
In the pairs space, the LONG AGL vs SHORT KIO idea is now higher by 20%.
The current chart, with the potential short term price path is shown below.
JSE Technical Summary: Mid & Large Caps (EOD Tues, 02 April)JSE Technical Summary: Mid & Large Caps (EOD Tues, 02 April)
THIS TABLE SHOWS A SHARE'S TECHNICAL RATING AT IT'S LAST CLOSE.
AGLAGL note from this morning (I have also discussed several other shares for active traders).
Wednesday 03 April 2024, 06h30 | AGL Anglo American Plc | Rating: High Bullish Momentum / Approaching Overbought. The share has traded into it’s declining 200-day SMA. Look for for the following: An overshoot and a failure to hold the prior session highs. This would signal that the share is losing upside momentum (over the ultra short term term). For active traders, this would open an opportunity for a tactical short/sell trade.
AGLLarge and Liquid: Reading from my TTG
Trading Time Frames:
Short Term (1 to 10 days)
Medium Term ( 2 to 4 weeks)
Long Term (5 to 8 weeks)
Readings subject to change, based on the development of price action.
The readings assume no existing position held by the trader.
Our opinion on the current state of AGLAnglo American, a globally diversified mining company, offers a unique position within the commodity market due to its broad portfolio of minerals and a robust balance sheet. This diversity acts as a hedge against the volatility often associated with single-mineral companies, reducing the impact of bear trends in any one mineral market. The company's strong financial position allows it to weather downturns effectively, providing a degree of security to investors.
Anglo American's operations span across world-class mining endeavors and untapped resources, marking its global footprint in the mining industry. The upward trend in commodity prices, evident since 2016, took a hit in March 2020 due to COVID-19 but has since shown signs of recovery, driven by economic expansion across the globe. Projects like Quellaveco in Peru, a significant copper mine where Anglo owns a 60% stake, highlight the company's investment in lucrative ventures with promising returns. Despite the initial $5.6 billion investment, the expected rapid payback and prolonged mine life position Anglo for substantial long-term gains.
The geopolitical tension in Ukraine and its resultant impact on commodity prices, particularly precious metals, further underline the strategic importance of Anglo's diversified portfolio. However, challenges such as logistical issues with Transnet in South Africa and broader market volatility underscore the complexities of the mining sector.
Anglo American's commitment to renewable energy in South Africa and its strategic review of assets reflect its adaptability and forward-thinking approach. Yet, recent financial results indicating a downturn in revenue and earnings, coupled with capital expenditure cuts, suggest a cautious outlook.
For investors, Anglo American presents an opportunity to engage with a leading player in the global mining sector, benefiting from its diversified operations and strategic initiatives. However, the current market conditions, underscored by its recent financial performance and technical analysis, suggest a wait-and-see approach, recommending potential investors to look for positive shifts in its market trajectory before committing.
Our opinion on the current state of AGLWith Anglo American (AGL), the risk normally associated with commodity stocks is mitigated in two ways. Firstly, the company has diversity of different minerals which reduces the impact of any one mineral entering a bear trend. Secondly, the traditional mechanism to avoid risk is to have a very strong balance sheet with plenty of headroom. That way, if things turn bad, you can ride out the storm. Anglo has such a balance sheet. Anglo describes itself as a globally diversified mining company with a portfolio of world-class mining operations and undeveloped resources. It is true that commodity prices as a group tend to move in trends, and since the beginning of 2016, that trend has been steadily upward until the corona virus caused markets to fall into a new downward trend in March 2020. The upward trend has now resumed, with a strong recovery already taking place. An Anglo project is Quellaveco in Peru which is a massive copper mine in which Anglo owns 60% of. It will have a very rapid payback period now that it has begun producing. It is costing $5,6bn to build which should be recovered in about 4 years - and then the mine has a life of 30 years. We believe that the boom in commodity prices is continuing, and that COVID-19 is substantially behind us - commodity prices will be driven on by the economic expansion which began in America and spread to Europe and the East. Of course, the conflict in Ukraine is pushing commodity prices up, especially precious metals, because of the heavy sanctions on Russia. So, if you are looking for an investment which is likely to be more exciting than buying one of the big banks or property REITs, and which will benefit directly from the growth in the world economy, you could do worse than to consider Anglo American. One of the factors holding the company back has been the poor availability of Transnet’s rail service, especially at Kumba. The company plans to get 100% of its energy needs from renewables in South Africa by 2023. In its results for the six months to 30th June 2023 the company reported production up 10% and group basket prices down 19%. Revenue was down 13% and headline earnings per share (HEPS) was down 55,3%. The PGM basket price was down 29%. In a production report for the 3 months to 30th September 2023 the company reported copper production up 42%, PGM production unchanged, iron ore production down 4%, nickel production down 7%, rough diamond production down 23% and steel making coal production down 21%. The company said, "A 42% increase in copper production as Quellaveco's contribution ramps up was offset primarily by De Beers, as Venetia transitions to underground operations, and by performance at Moranbah and the Grosvenor ramp-up at the underground Steelmaking Coal operations." Anglo’s share price went up six-fold in under three years and rose to R425 before the corona epidemic. It fell to R210 and then recovered to over R800 before the problems at Los Broncos. The current fall in the share price is a result of the drop in commodity prices. This was illustrated in the latest results from Kumba where there are production problems and lower grades from the Chile copper production which resulted in a flat production report for the third quarter to 30th September 2022. It is clear that the company is being badly impacted by both the increased load shedding and problems with the South African rail service. Technically, the share appears to have completed the head-and-shoulders formation and broken down through the neckline at R525. The stage is now set for further falls. On 11th December 2023 the Business Day reported that Anglo had announced capital expenditure cuts of R1,8bn causing the share price to drop by 13,3%.
Anglo American Worth a TradeAnglo American has closed above the green line and the 10 week moving average, price is now seeking a cycle low defined by the blue upslopping line. Price going below this line signifies a daily cycle low. The challenge is that the line is rather flat so we must look out for price going lower than R471.64, this would reset the weekly low. A close above the pink downward slopping line means we leave behind a cycle low, if we do this without breaching R471.64 we can expect a powerful move upwards of at least 10%. Since we are anticipating a recession, we must be alert to the weekly cycle failing early.
Uptrend of Anglo American The daily, weekly and monthly chart are all showing signs that this is on an uptrend!
Daily/Weekly: Broken above the resistance
Monthly: MACD is turning
P/S ratio showing this company is undervalued.
Economics: Higher Copper, Platinum, Diamond or China industrials will pump this stock further.
Our opinion on the current state of AGLWith Anglo American (AGL), the risk normally associated with commodity stocks is mitigated in two ways. Firstly, the company has diversity of different minerals which reduces the impact of any one mineral entering a bear trend. Secondly, the traditional mechanism to avoid risk is to have a very strong balance sheet with plenty of headroom. That way, if things turn bad, you can ride out the storm. Anglo has such a balance sheet. Anglo describes itself as a globally diversified mining company with a portfolio of world-class mining operations and undeveloped resources. It is true that commodity prices as a group tend to move in trends, and since the beginning of 2016, that trend has been steadily upward until the corona virus caused markets to fall into a new downward trend in March 2020. The upward trend has now resumed, with a strong recovery already taking place. An Anglo project is Quellaveco in Peru which is a massive copper mine in which Anglo owns 60% of. It will have a very rapid payback period now that it has begun producing. It is costing $5,6bn to build which should be recovered in about 4 years - and then the mine has a life of 30 years. We believe that the boom in commodity prices is continuing, and that COVID-19 is substantially behind us - commodity prices will be driven on by the economic expansion which began in America and spread to Europe and the East. Of course, the conflict in Ukraine is pushing commodity prices up, especially precious metals, because of the heavy sanctions on Russia. So, if you are looking for an investment which is likely to be more exciting than buying one of the big banks or property REITs, and which will benefit directly from the growth in the world economy, you could do worse than to consider Anglo American. One of the factors holding the company back has been the poor availability of Transnet’s rail service, especially at Kumba. The company plans to get 100% of its energy needs from renewables in South Africa by 2023. In its results for the six months to 30th June 2023 the company reported production up 10% and group basket prices down 19%. Revenue was down 13% and headline earnings per share (HEPS) was down 55,3%. The PGM basket price was down 29%. In a production report for the 3 months to 30th September 2023 the company reported copper production up 42%, PGM production unchanged, iron ore production down 4%, nickel production down 7%, rough diamond production down 23% and steel making coal production down 21%. The company said, "A 42% increase in copper production as Quellaveco's contribution ramps up was offset primarily by De Beers, as Venetia transitions to underground operations, and by performance at Moranbah and the Grosvenor ramp-up at the underground Steelmaking Coal operations". Anglo’s share price went up six-fold in under three years and rose to R425 before the corona epidemic. It fell to R210 and then recovered to over R800 before the problems at Los Broncos. The current fall in the share price is a result of the drop in commodity prices. This was illustrated in the latest results from Kumba where there are production problems and lower grades from the Chile copper production which resulted in a flat production report for the third quarter to 30th September 2022. It is clear that the company is being badly impacted by both the increased load shedding and problems with the South African rail service. Technically, the share appears to have completed the head-and-shoulders formation and broken down through the neckline at R525. The stage is now set for further falls.
Anglo American PlcA bearish Head & Shoulder pattern unfolding on Anglo's weekly chart, which may target 300 in the medium term albert with some support levels to be overcome along the way, with the 1st one being the 400-420 area, followed by the 330ish area.
Either way, I'm calling it 300!
*This is a medium-long term play.
Anglo American Monthly ViewAnglo American is in pursuit of a yearly low, first we look for a swing low, then a close above the 10 period moving average. At a minimum the yearly low will see price breach the upper resistance of the Pitchfork. In terms of time, we are within a time after a long cycle from the COVID lows.
AGL short idea Daily chartShort Idea
Anglo American has rejected the R546,00 confluence resistance zone and is no looking to head lower and retest its yearly lows
entry : R517.00
stop : R545.00
target : R457.00
$JSEAGL #Anglo Has A Fight On Its HandsIn the last couple of months we have seen the completion of a massive Head & Shoulders pattern on Anglo American PLC that has been in the making for almost three years. In my view the scariest thing of all is that this pattern sits on a Weekly chart! The price has clearly broken below the neckline and my view is that #Anglo will now really have to dig deep, if you don't mind me using this term, to get above that neckline fairly soon again. Failing to do so or any further loss of territory might see things not ending well, as the target projection of the pattern shows a possible price of closer to R200-00.
JSE Diversified Miners Relative To JSE Top 40The following comment was included as part of today's research. For more research insights, including trade ideas, get in touch today.
JSE Diversified Miners vs JSE Top 40 Index. The price action could improve before the news gets better. Last week we saw some resource shares stabilize (AGL and PGMs) which is in the midst of the ongoing Chinese economic weakness. My underweight view of sector vs the broader market (22 November 2022) has gone well beyond expectations with the sector subsequently being a serial underperformer (-19% over the period). I will acknowledge that I can't pick the bottom however we can rely on a combination of factors that help us assess when the reward-to-risk is appealing. Going through the 'Distance' charts, I've noticed the ratio (Miners vs Top 40) has developed a lower low while the distance vs the 200-day SMA is relatively 'flat' (a positive divergence). Most names acted well today. It looks like that 475-ish level on AGL has held again. If you go back, that was previously a major support zone.
Attached to this post is the chart I published in November highlighting the potentially bearish underperformance of JSE Miners vs JSE Top 40.
AGL Pursuing a Weekly LowAGL is seeking a weekly and yearly low, current cycle is failed with a possibility of 6 July being a low, however since we expect a bounce in the US dollar index, there is room for AGL to have a lower low. A yearly low is entails price going lower than the highest low of the previous weekly cycle, we have not yet satisfied that parameter with AngloAmerican, the price where that will be is R493.68.
However should price close above the green declining trendline on a weekly basis, we know we have left behind a weekly low with yearly low a confirmed close above the final resistance near R700.We open long positions on close above the green line, there will be sufficient lift to take profit & if the yearly cycle is not confirmed & yearly low is ahead, there will be another great entry opportunity.
It is also worthy of note that price as recovered the 200 week moving average as well as the bullish wedge.
