Chart of the Day: The trend is your friend, Vulcan fans
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Vulcan has been captivating the hearts and minds of ESG investors for some time now, and is really one of the great wealth creation stories of the last few years.
To give a sense for just how potent the name has been, we might like to recall that at the nadir of the COVID inspired shakeout in March of 2020, VUL clocked in at a low of 15c.
That was just 18 months ago!!!
Difficult to imagine, but it is yours today for approximately 75x that value at ~1160c.
Fast forward to calendar year 2021, and there are multiple bullish trend lines to clearly observe.
The company recently completed a $200m (!) placement at 1360c, and duly sailed straight through that level to test 1100c again this morning.
I sense opportunity.
The trend lines aside, today is the first day that – so far – the name is showing some more meaningful resilience, up 73c at the time of writing to 1163c, or 6.7%.
If it can fashion a strong close today at current levels or better, it will qualify as a reversal of recent weakness.
There are a variety of upside targets littered across the chart, not the least of which would be the recent raise price of 1350c.
The stock is reasonably uncorrelated to the broader market also, which is something we think about given that the broader market is looking increasingly uncertain in the very short term, and/or is in the midst of a typically volatile seasonal period (late September/early October).
We are long as of today, with a stop at 980c, and a first target of 1350c.
Vulcan is as liquid as they come for emerging names, so you won’t get stuck unless you choose to.
Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.
Collette Capital only makes services available to professional and sophisticated investors as defined by the Corporations Act, Section (s)708(8)C and 761G(7)C.
The Collette Capital Wholesale IMA Strategy has returned +24.83% p.a. net of all fees as at the end of September 2021 since inception in January 2015 (using the Time Weighted Return method of calculating returns).
Learn more at www.collette.capital