Where are WA1 Resources Ltd (ASX: WA1) shares heading after more than 100% gain in a month?

Highlights

• WA1 Resources Ltd shares are up 1,746% in one year.
• In just one month, the stock has more than doubled.
• On Monday, 15 May 2023, the stock soared another 10% after the company made an announcement.

WA1 Resources Ltd (ASX:WA1) shares have jumped nearly 106% in the last one month amid various announcements by the company. On Monday, 15 May 2023, the stock soared another 10% after the company announced that Regal Funds Management, one of Australia’s largest institutional investors, will subscribe for 3.6 million new shares of the company at a price of AUD 2.75 per share, a 2% discount to the 5-day VWAP of the stock.

This institutional placement of shares will help the company raise AUD 10 million (before the placement cost) to support further exploration drilling and development activities at the West Arunta Project. Once the proposed placement is complete, WA1 Resources will have approximately AUD 20 million cash in hand.

Including today's gains, WA1 shares are up a whopping 2900% in the previous nine months and on one-year basis, the stock is up 1,746%. Monday's closing price was a fresh 52-week high for the stock.

Earlier on 1 May 2023, the company said in an ASX announcement that high-grade niobium mineralisation is continuing to extend (at least 400m to the east and 200m south of drill hole LURC003 and is open in all directions) at Luni. On that date, WA1 shares surged 29.25%. This was the biggest percentage one-day move in the stock in the last three months.

Given the recent surge in WA1 shares, will it move further in the coming days? Let’s study the price chart of WA1 to get further information.

WA1’s Technical Analysis:

WA1’s price started to move upside after taking the support from a falling trendline, indicating the possibility of further upside movement hereon. Moreover, RSI (14-period) is moving northward with a reading of 82.16, supporting a positive bias. Further, prices are trading above the 21-period SMA, which may act as a support level. Important support for the stock is positioned at AUD 3.30, while key resistance is placed at AUD 4.00.

Daily Technical Chart – WA1

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The technical levels for the stock were evaluated as per the closing price of AUD 3.600 per share, up 10.09%, as on 15 May 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

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: It is a level to protect further losses in case of unfavourable movement in the stock prices.

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, prices are currently in a bullish trend (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Orange/ Yellow colour line represents the Trendline.

The Purple 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.

Disclaimer

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