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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (33390)	8/23/2017 6:20:59 PM
From: Goose94	Read Replies (1) \| Respond to of 203019

Cobalt: I've touched on cobalt a lot this year because it's a metal with a very unique set of factors that affect its supply/demand balance, the key ones being: * A tiny market size meaning it is prone to demand induced price shocks * Supply that is dominated by production from one of the worlds least geopolitically unstable countries, the Democratic Republic of Congo (DRC) * Demand that appears to be soaring thanks to cobalt being arguably the key input in most of the Li-ion battery chemistries that electric vehicles industry is moving towards. Without going into the details (you can read my original write up from back in February here), the cobalt story is playing out largely as I expected with cobalt prices up over 140% from the 2016 lows. The cobalt price has been consolidating in a relatively narrow range over the past 4 months, forming a bullish ascending triangle, a continuation pattern that often forms during strong up-trends. Price is now threatening to breakout topside, as shown in the chart below by the weekly close at the high of its trading range. Figure 6: Weekly cobalt price candlestick chart, as of Friday, 18th of August, 2017. Source: Thomson Eikon Whilst technical patterns are never a guarantee of higher prices, a topside break over the coming few weeks would indicate continued buying pressure and would suggest the balance of probabilities has moved in favor of further price increases. Lastly, we are moving towards the time of the year where the DRC political issues are likely to come to a head as the current president, Joseph Kabila, has promised that he will hold democratic elections by the end of 2017, something that now looks to be an almost impossibility. Given the country is responsible for 60% to 65% of global mine production, there's the potential for us to see a serious impact to global supply should we see material unrest in the country. In other words, if you're invested in the cobalt space, keep a very close eye on the DRC over the next four months. Sam Broom