Company Overview: Graphite One Inc. (TSXV: GPH) (the 'Project') to become an American producer of high-grade anode materials that is integrated with a domestic graphite resource. This Report covers the Price Action, Technical Indicators Analysis along with the Stop Loss Levels, Target Prices, and Recommendations on this one stock.

Canada Market Round-Up

The benchmark S&P/TSX Venture Composite Index (TSX: ^JX) started the week on a positive note and continued the momentum. On May 16, 2024, the index closed at 603.27 with an overall week-to-date (WTD) gain of 0.99%. Technology, Financials, Industrials, and Basic Materials were the leading sectors, While Consumer Non-Cyclicals, Real Estate, Consumer Cyclicals, Healthcare, and Energy were the laggards on Thursday.

As per the weekly chart analysis, the index prices are trading above a falling trend line breakout level. The leading indicator RSI (14-period) is hovering above the midpoint and is showing a reading of ~61.39. Furthermore, the prices are trading above the  21-period SMA, which may act as a support zone in the near term.

Global Markets Wrap-Up

On May 16, 2024, the S&P 500 index settled at 5297.10 with a WTD gain of 1.45%. Moreover, tech-heavy NASDAQ composite gain by ~2.19% on a WTD basis and settled at 16698.32, whereas Russell 2000 settled at 2096.25, reflecting a gain of ~1.77% on WTD basis.

Considering the US market's performance over the week, following the significant global macros and data front, and analysing the S&P/TSX Venture Composite Index, one TSX-listed stock fist the criteria on the technical framework: Graphite One Inc. (TSXV: GPH). The recommendation on this stock is based on the generic insights, entry price, target prices, and stop-loss for the next 2-6 weeks:

Graphite One Inc. (TSXV: GPH)

Noted below are the key price indicators for the stock:

Price Action Analysis (on the Daily Chart)

On the daily chart, GPH stock price is trading above the falling trendline breakout level, indicating the possibility of an upside movement hereon. The next resistance level is plotted around CAD 0.97, and the price may test this level in the short term (2-6 weeks). A further movement above CAD 0.97 may extend buying in the stock.

Technical Analysis (On the Daily Chart)

On the daily chart, the momentum oscillator RSI (14-Period) is showing a reading of ~66.64 levels, indicating positive momentum. The weekly volumes also seem supportive of an upside movement. Further, the current market price (CMP) is above the trend-following indicators 21-period & 50-period SMAs, which may act as the support levels.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Graphite One Inc. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decisions 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. Graphite One Inc. (TSXV:GPH) was last covered in a report dated '19 January 2024'. The summary of recommendations is as follows:

Upcoming Major Global Economic Events

Market events occur daily depending on the data's frequency and generally include updates on CPI, PPI, Core Retail Sales, Unemployment Data, etc. The upcoming week's major global economic events that could impact the S&P/TSX Venture Composite Index and listed stocks' prices are noted below.

Related Risks: This report may be looked at from a high-risk perspective and recommendation is provided 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.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Individuals can consider exiting from the stock if the Target Price or Stop loss mentioned as per the technical analysis has been achieved and subject to the factors discussed above.

Note 2: How to Read the Charts?

The Green color line reflects the 21-period moving average, while the red color line indicates the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black color 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.

The Blue color bars in the chart's lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume. Liquidity in stocks helps in easier and faster execution of the order.

The Orange color lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

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: In general, it is a level to protect further losses in case of unfavorable movement in the stock prices.

Risk Reward Ratio: The risk reward ratio is the difference between an entry point to a stop loss and profit level and the report is based on ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favorable movement in the price to protect the gains. Individual can Trail the Stop-Loss as per the levels if the stock price achieves more than 50% of the Target 1. Individual should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 16, 2024. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

CAD: Canadian Dollar

RSI: Relative Strength Index

Note: Trading decisions require a thorough analysis by individuals. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.