LON:SLP | Sylvania Platinum - Eyeing For A Good Swing Trade

20th Dec '20 by Michael Dobrzanski

8 comments 878 reads

Hello everyone,

This is my first post here, and I'm sharing one of the stocks which I am considering to go long for the next couple of weeks. Over the past, I've traded a variety of different securities, but it was in fact this summer where my swing-trading activities went full time. Although I also used to day trade, I quickly realised that it was not as rewarding as swing trading, especially for the amount of time it used to consume. So, as I am swing trading with confidence now, I am willing to share one particular stock which I am seriously eyeing, and that is Sylvania Platinum (LON:SLP) (Sylvania Platinum). After having conducted a significant amount of research on here and on my charts through technical analysis, I believe there is good amount of upside momentum awaiting. However, there's a catch - and I'll discuss this later on, but for now, allow me to present a very nice daily chart of £SLP.

(Chart 1) - Indicators: Stochastic top, RSI (14) bottom.

Here, you can clearly see that Sylvania Platinum (LON:SLP) has been trading within an uptrend channel ever since the crash in March. Given this channel, the stock has gained 231% since then. At first thought, you'd think that the stock would continue to go a little higher before touching that upper trendline. However - a continuous test of the 80.00p level suggests the pair may be overbought in the current time frame (daily). This is highly represented by the current levels in the Stochastic, RSI and Williams R% indicators.

(Chart 2)

As presented by the chart above, the daily chart implies that the Stochastic (top), RSI (middle) and Williams R% (bottom) indicators all seem to have had their run for the past couple days. And this makes sense if you think about it, because the price is currently way above the lower trendline in the daily uptrend channel (chart 1). Therefore, I as say I am eyeing Sylvania Platinum (LON:SLP), I believe there is reason to wait until things cool down and these metrics are found to be sitting in the lower areas again. This does not mean a pullback of large magnitude, but the price action may follow what the uptrend…

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William K

20th Dec '20

Thanks Michael Dobrzanski. An useful analysis. I've held Sylvania Platinum (LON:SLP) since January 2019 and followed its daily price movements with interest. The fundamentals are excellent (as many of this forum agree) and my personal view is that the price will continue to rise and possibly double over the next couple of years, particularly if the demand for platinum, rhodium and palladium accelerates. For me it's a 'buy-and-hold' rather than a swing trade. If I were swing trading it, I'd wait for a pullback to 68-70 as I think that's a more likely scenario than a sudden surge up to 100. Of course I'd be delighted to be proved wrong. Would I buy more at 80 pence? No. Would I sell at 100 pence? No. My target is around the 150-160 mark and I'm prepared to be patient.

Momoko Miyamoto

Me too, bought and hold to ride the coming hydrogen/platinum/fuel cell wave. Low cost rhodium producer too which is a massive bonus while diesel engines still need clean air catalysts. Political and operational risk as with many mining companies but management seem solid - unlike the shady lot at Jubilee Metals (LON:JLP)

Rusty2

I have held Sylvania Platinum (LON:SLP) for about a year now. But looking at the chart if it does not break out this time, then it’s a triple top which is a negative chart sign I believe, so there maybe a pull back.

Macro

Michael,

Sylvania Platinum (LON:SLP) is a curious one.

In another toolset the fair value estimate is 150p, and the EPS forecasts are growing nicely. ... So it is a "good un".

But, the auto-support and resistance values show support at 52p and 24p. That's some way away for an entry at 80p. There is a new-ish resistance level at 75p which will hopefully become support - but that is currently within 'stop distance' so it not much practical use, yet.

Another but, ... the momentum comes in waves and it is currently at the top of previous momentum ranges. More positively recently it has not suffered from much negative momentum down-swings.

Another but, ... Sylvania Platinum (LON:SLP) is not that liquid.

Overall I think Sylvania Platinum (LON:SLP) should do well, but entry at a trough in momentum would be more comfortable?

MACD on standard settings (12,26,9) gets you in quite late. Full Stochastics on a normal setting of (14,3) is slightly earlier. Whereas Slow Stochastics on shorter settings (5,1) gets you in earlier still.

robin penfold

21st Dec '20

As a share holder that has periodically bought and sold this stock over the last 3 years my observations are as follows:

1) The share price is being driven by Rhodium not Platinum. Whilst Platinum mat equate to over 60% of its PGM production it is Rhodium's around 12% of Production with a current record price of 16,650$ an ounce (less than $6,000 a year ago) that is the driver of both profit and cash. Palladium is also broadly an equal contributor to profit with Platinum.

2) All 3 PGMs Platinum, Palladium and Rhodium are likely to be in a supply deficit this year and next.

3) The share price is following a similar pattern to earlier this year and most followers will be expecting /hoping for a break-out towards 100p /120p from around midJan through Q1 2021. Record profits for the 1/2 yr are likely to be announced mid Feb but anybody with the time can calculate the likely 11p plus of 6 month EPS from the Operational Report that will be published in January 2021.

In conclusion, whilst I am not strictly a trader, any pullback from current levels (78p) will likely prove an excellent buying opportunity, not least with a "one-off" metals dividend to be declared and paid in Q1 2021.

Gromley

Good observations robin.

I'm going to say something that I would have considered perverse not so long ago, but I'm going to counter your "any pullback from current levels (78p) will likely prove an excellent buying opportunity". With

"any (convincing) breakout above the recent highs around 80p will likely prove an excellent buying opportunity."

;-0

5fe12fea3a33820201221-slp-short-term-cha

I am not by nature a follower of the Voodoo, but in the current market it has been a really useful signal of all important sentiment,

I'm currently Long Sylvania Platinum (LON:SLP) , but it's not quite expensive enough for me to buy more as it stands. (Never thought I would writing phrases like that!!)

22nd Dec '20

Gromley,

I do not disagree with your logic, any breakout above 80p will just support my views as well. In order to achieve my expectations it will have to breakout.

Perhaps a risk to the SP is the potential for another lock-down in SA as covid numbers rise despite it being Summer!

KevinS1

Do tell more about Jubilee Metals (LON:JLP) ??

Sylvania Platinum - Eyeing for a good swing trade

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Michael Dobrzanski

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