These Sectors Are Running Hard: Pot Stocks, Rare Earths and Nickel

In today’s Money Morning…pot stocks appear to be turning a corner…rare earths on the comeback trail…long-term uptrend in nickel…and more…

It looks like the Santa rally has started early this year.

There’s plenty going on with banks and large-cap resources flying, but there’s also some action in the small-cap space.

As Lachlann Tierney has been pointing out recently, pot stocks appear to be turning a corner, but I think the jury is still out about which business model is going to be a success in the sector.

I reckon the pot stocks that are focused on doing clinical research on the efficacy of their products and that have some proprietary knowledge that they can protect will probably have the best chance of creating a self-sustaining business in the future.

The ones that jump out at me on that front are Zelira Therapeutics Ltd [ASX:ZLD] (this stock is in the Pivot Trader portfolio) and Botanix Pharmaceuticals Ltd [ASX:BOT].

Both have seen strong buying since the crash with ZLD up 250% to 7.8 cents and BOT rising 440% from a low of 2.3 cents to the current price of 12.5 cents.

Resources related to battery production are all blasting off.

Rare earths have had a false break of the 2016 low and are soaring.

How to buy into the NEXT battery boom (free report)

Rare earths on the comeback trail

Port Phillip Publishing


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Lynas Corporation Ltd [ASX:LYC] (in the Pivot Trader portfolio) has been the standout performer in the rare earths sector but other up and comers are all seeing uptrends develop. Pensana Metals Ltd [ASX:PM8], Hastings Technology Metals Ltd [ASX:HAS], Greenland Minerals Ltd [ASX:GGG], and Arafura Resources Ltd [ASX:ARU] are all starting to look pretty hot.

Lithium is also heading higher despite the supply overhang and Orocobre Ltd [ASX:ORE] (in the Pivot Trader portfolio), Galaxy Resources Ltd [ASX:GXY], and Pilbara Minerals Ltd [ASX:PLS] are jumping.

Nickel is also looking strong as an ox and probably has further to run.

Long-term uptrend in nickel

Port Phillip Publishing


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I like Panoramic Resources Ltd [ASX:PAN] (in the Pivot Trader portfolio) in the nickel space because of the upside from the derisking of restarting operations at Savannah. Blackstone Minerals Ltd’s [ASX:BSX] Ta Khao project in Northern Vietnam is also worth keeping your eye on, although the stock has already run pretty hard.

If it were to drift back towards the low to mid-20s, I would be interested in picking a few up.

Don’t forget about the white hot HPA (High Purity Alumina) sector either. There are a few stocks in the Kaolin space that hope to be HPA producers in future, but they have been running on the strength of the low capital cost projects that they are working on.

Andromeda Metals Ltd [ASX:ADN] and Minotaur Exploration Ltd [ASX:MEP] are the market darlings at the moment, but I reckon a market cap of $600 million for ADN is getting a bit over the top. Check out Pure Minerals Ltd [ASX:PM1] which is up 24% today.

Their Townsville Energy Chemicals Hub (‘TECH’) Project will process high-grade nickel-cobalt laterite ore imported from New Caledonia to produce battery chemicals for the emerging electric vehicle sector.

I reckon they are one to watch.

FYI Resources Ltd [ASX:FYI] is another HPA hopeful that has been running pretty hard lately but their market cap is still very reasonable at $60 million. They are in a trading halt today to raise $5 million at 20 cents. Once the raising is done and dusted I reckon that is one worth putting in the bottom drawer.


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Murray Dawes,
For Money Weekend

PS: STOP PRESS — A Special Announcement from the Publisher

This year in Money Morning, we’ve covered the rise and further rise of clean energy. Next week…we kick things up a notch…

What will Australia’s place be in the global renewable energy step-change over the coming decade?

And which stocks and industries are mostly likely to benefit?

Ryan, Lachlann, and the Money Morning team are preparing to release their predictions.

It’s the culmination of months of work.

And it’s a decidedly left-field take compared to what’s being trotted out by the mainstream media.

I’m almost certain the stocks we’re going to shine a light on next week are ones you’ve never heard the names of.

All I ask is this — before we drop the research:

Park any scepticism you might have at the gate.

You might well believe this green energy boom is a bit of a mania. That fossil fuels won’t just go quietly into the night…and that our roads will growl and pop to the sound of the great V8 for years to come.

Fine. You can hold that view…and STILL benefit greatly from the story we’re going to break next week.

Like it or not, a once-in-a-lifetime money migration has been set in motion.

It’s a migration that will have second-order consequences.

You’re already seeing these manifest in certain stock prices.

But it’s just the very beginning.

The idea is to do your best to foresee, measure and put a dollar value on these second-order consequences. And give yourself the best possible chance to make money from them.

The stocks we’re going to profile give you a great shot at doing exactly that.

While they are inherently risky, they’re optimal buys right now if you’re a speculator.

But even if you’re not…this is a story you need to hear.

Tune in next week for Australia’s Green Energy ‘Second-Order Effect’…


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James Woodburn,
Group Publisher

PS: How to Find Promising Energy Stocks — Discover why the energy market is ripe for massive disruption and how to identify innovative energy stocks. Click here to learn more. 

Murray Dawes is the Editor of Pivot Trader and contributing Editor at Money Morning. He was one of five, from 5,000 applicants, chosen for a graduate position with the Swiss Banking Corporation — now part of banking giant UBS. The bosses quickly cottoned on to his potential and pushed him up the ranks as a futures broker on the floors of the Sydney Futures Exchange. Murray later broke out on his own and developed custom trading systems to trade leveraged financial instruments like futures. Due to his success, Murray became the ‘hired gun’ trader for Australia’s rich and famous. Today, Murray runs a trading service through Fat Tail Investment Research to help everyday Aussie investors use his advanced trading methods.

Money Morning Australia