Phat Squiggly Lines: Resources for Christmas shopping ⛏️

Phat squiggly lines is where pro traders get a technical take on the stock markets – with Kieran Neeson, Opentrader's in-house trading guru.

Resources for Christmas shopping 

Maybe now’s the time to be a little naughty with the hope that Santa gets a little confused and leaves either some lithium or iron ore in your stocking. We have a look at a couple of stocks raring to break out to the upside coming into the silly season. 

Market overview Tuesday 14 December 

The ASX 200 (ASX:XJO) has started the week on a positive note after major indices in the US set new record highs during Friday’s session.  

From a technical standpoint, the market is getting somewhat tangled around the 50-day moving average and has found resistance at 7400 points. The overall picture is still reasonably good heading into the last three weeks of the year and if history is anything to go by, we should see some seasonal strength and buying kick in from this week. 

  1. Market now at short-term resistance at 7400 
  2. Market found support and bounced off 200-day moving average 

Stocks to watch

Pilbara Mining  

Pilbara Mining (ASX:PLS) is one of Australia’s leading lithium producers which is one of the main ingredients that goes into batteries that power electric vehicles. The stock has had an incredible run over the past couple of years, rallying from $0.15 in March 2020 to $2.75 where it’s trading today. 

Technically the stock is forming a classic breakout accompanied by decent volume which is always a good sign as this indicates there is clear buying pressure and genuine demand for the stock.  

The chart suggests that the stock wants to go higher from here as it’s breaking to new all-time highs, so the logical next stop is around $3 or about 10% higher. We’d expect this move to occur imminently if this scenario were to play out. One to watch in the coming days. 

  1. Breaking out to new all-time highs 
  2. Initial profit target of $3.00 

Rio Tinto  

Rio Tinto (ASX:RIO) is one the largest producers of iron ore globally and is starting to form a really interesting pattern. The stock is breaking out of a short-term consolidation and is looking bullish, so our bias is towards the upside with an initial profit target up near the 200-day moving average or approx. 10% higher at $110. Definitely one to watch heading into Christmas. 

  1. Breakout from short term consolidation
  2. Initial profit target of $110 or 10% higher near the 200-day moving average 

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