This report is an updated version of the report published on October 04, 2022, at 08:15 AM GMT+1. 

FTSE All-Share Index (.FTAS) Market Round-Up 

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a negative note and continued its bearish momentum. The index plunged below the 3800 level during the week and settled at 3763.480 with a loss of ~2.21 percent for the week ending September 30, 2022. The recent week started on a marginally positive note and prices are hovering around 3800 level.  

On the technical front, prices took support around a horizontal line and are trading around the same. On the weekly chart, the prices are sustaining below the 21-period and 50-period SMA, supporting a downward direction. The leading indicator RSI (14-period) is around the oversold zone and shows a reading of 34.58. 

The global equities continued to witness a sell-off after the UK's mini-budget announcement coupled with the US Federal Reserve's indications about the aggressive interest rate hike. However, a decrease in the UK current account deficit (excluding precious metals) which declined to 5.3% of GDP in Q2 2022 compared to 6.1% in the previous quarter, limiting the losses. 

 

Global Markets Wrap-Up 

Wall Street traded lower last week and the two benchmark indices ended in the red. TheS&P 500 settled at 3585.62 with a loss of ~2.91 percent, while the NASDAQ Composite Index settled at 10575.61 with a loss of ~2.69 percent for the week ending September 30, 2022.   

Having understood the US market performance over the past week, taking cues from major global news, and based on technical analysis of the FTSE All-Share Index (.FTAS) for the upcoming week, now have a look at the two LSE-listed stock picks from the technical standpoint. Noted below are the recommendations based on entry price, target prices, and stop-loss for Atlantic Lithium Limited (LON: ALL) and Arrow Exploration Corp. (LON: AXL) for the next 2-4 weeks duration: 

   

Atlantic Lithium Limited 

Atlantic Lithium Limited (LON: ALL) is an Australia-based lithium company. Its portfolio comprises the Ewoyaa Project in Ghana with lithium pegmatite. Noted below are the key price indicators for the stock: 

 

Price Action Analysis (on the Weekly Chart)  

ALL’s prices took support from a rising trendline and started to move upward, indicating the possibility of an upside movement. Now the next important resistance level for the stock appears at GBX 43.00 and prices may test this level in the short-term (2-4 weeks). A further movement above GBX 43.00 backed by volumes may extend buying in the stock. 

 

Technical Indicators Analysis (On the Weekly Chart)  

On the weekly chart,the RSI (14-Period) is moving around the midpoint and showing a reading of ~46.52.The volumes seem supportive of an upside movement. However, the CMP is below the trend-following indicators 21-period SMA and 50-period SMA, which may act as the resistance. 

 

General Recommendation:  

As per the above-mentioned price action and technical indicators analysis, Atlantic Lithium Limited 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. The summary of recommendation is as follow: 

 

Arrow Exploration Corp. 

Arrow Exploration Corp. (LON: AXL) is a Canada-based company engaged in oil and gas exploration. Noted below are the key price indicators for the stock: 

 

Price Action Analysis (on the Weekly Chart)

AXL's prices started to move upside after taking support from the rising trendline and are sustaining above the same trendline, indicating the possibility of further upside movement. Now the next important resistance level for the stock appears at GBX 21.00 and prices may test this level in the short-term (2-4 weeks). A further movement above GBX 21.00 backed by volumes may extend buying in the stock. 

 

Technical Indicators Analysis (On the Weekly Chart)  

On the weekly chart,the RSI (14-Period) is showing a reading of ~57.96, indicating a positive momentum build-up at the current levels. The volumes seem supportive of an upside movement. The CMP is above the trend-following indicator 21-period SMA, further supporting an up move. 

 

General Recommendation:  

As per the above-mentioned price action and technical indicators analysis, Arrow Exploration Corp. 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. The summary of recommendation is as follow: 

 

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.  

Upcoming Major Global Economic Events 

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the FTSE All-Share Index and listed stocks’ prices. 

 

Related Risks: This report may be looked at from a 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. 

 

Note 1: Individuals can consider exiting from the stock if the Target Price 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 colour line reflects the 21-period moving average while the red 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 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.   

The Blue colour 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 and liquidity in stocks helps in easier and faster execution of the order.  

The Orange colour 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 unfavourable movement in the stock prices. 

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. This 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 favourable movement in the price to protect the gains. Individuals can Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Individuals 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 October 03, 2022. The reference data in this report has been partly sourced from REFINITIV.  

Abbreviations 

CMP: Current Market Price 

SMA: Simple Moving Average 

GBP: British pound sterling 

GBX: British pence sterling 

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. 

NATIONAL GRI 

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