Table of Contents
Understanding Stock Valuation: Cheap vs. Expensive
Take a moment to examine two stock charts—Technology One (TNE) and Coronado Global Resources (CRN). This comparison raises an essential question: do you consider these stocks "cheap" or "expensive"? Your perspective here serves as a fundamental reflection of your investment philosophy.
TNE’s chart illustrates a classic uptrend, suggested by a pattern moving from the bottom left to the top right. Such a trajectory signals strong demand, indicating that investors are largely optimistic about the stock’s future. This bullish sentiment leads to tight supply, with many holders unwilling to sell. These investors’ outlooks raise another question: do they view TNE as "cheap" or "expensive"?
Conversely, the downward trend depicted in CRN’s chart is stark. The price movement from the top left to bottom right indicates heavy selling activity, driven by investors eager to offload their shares into a weak demand environment. This trend prompts similar reflection—how do current investors perceive CRN?
Two key insights emerge from this analysis:
- Your individual perception of a stock’s value is secondary. The market’s collective sentiment dictates price movements.
- Rather than labelling stocks as "cheap" or "expensive," it’s more beneficial to focus on market trends. Observing consensus amongst investors can guide your decisions.
ChartWatch Daily ASX Scans
Welcome to the ChartWatch Daily ASX Scans, a series dedicated to identifying the most significant trends on the Australian Stock Exchange (ASX). My approach relies heavily on trend-following technical analysis to spotlight stocks in pronounced uptrends or downtrends.
Both uptrends and downtrends can serve different investment strategies. Some prefer to buy stocks in strong uptrends, while others might short sell those in downtrends. Regardless of strategy, individual research remains critical. Stocks may frequently reappear on scan lists, but their absence should prompt further investigation into changing trends.
Uptrends Scan List
Below is the Uptrends Scan List, detailing the stocks that have shown strong performance in the last month and year:
| Company | Code | Last Price | 1mo % | 1yr % |
|---|---|---|---|---|
| Australian Finance Group | AFG | $2.12 | +24.7% | +44.7% |
| Almonty Industries | AII | $2.84 | +5.2% | +365.6% |
| AMA Group | AMA | $0.089 | +48.3% | +116.3% |
| Aspen Group | APZ | $3.43 | +12.5% | +99.4% |
| BetaShares Global Defence ETF | ARMR | $22.40 | +8.3% | 0% |
… [Table truncated for brevity]
Highlighted stocks exhibiting exceptional demand include Australian Finance Group, Almonty Industries, and Technology One. This trend indicates strong investor confidence and persistent buying pressure.
Downtrends Scan List
Conversely, the Downtrends Scan List reflects stocks experiencing significant downward pressure over the past month and year:
| Company | Code | Last Price | 1mo % | 1yr % |
|---|---|---|---|---|
| AIC Mines | A1M | $0.325 | -7.1% | -38.1% |
| AGL Energy | AGL | $10.29 | +0.3% | -1.7% |
| Austin Engineering | ANG | $0.355 | -18.4% | -30.4% |
| Bellevue Gold | BGL | $0.850 | -12.4% | -50.7% |
| Coronado Global Resources | CRN | $0.150 | -33.3% | -86.5% |
… [Table truncated for brevity]
Stocks like Coronado Global Resources highlight the excess supply in varying markets and demonstrate the critical need for investors to reassess their portfolios.
Concluding Thoughts
In conclusion, viewing stocks through the lens of "cheap" versus "expensive" can be misleading. A more effective investment strategy focuses on prevailing trends and market consensus. As market dynamics continue to evolve, your ability to adapt and conduct regular research will be paramount in navigating this complex landscape. Always remember, the future remains uncertain, and trends can shift unexpectedly.
