Gold-Stock Cycle As gold price continues to surge and reach new highs, ARM is getting out of a multi-year consolidation as it recently completed a triangle pattern. It is currently unfolding in a new impulse that is yet to be confirmed.
Trade ideas
Buy opportunity (ARI) TECHNICAL ANALYSIS
Zone of demand/support was created during mid-May 2020 @ R125 to R133
Buy opportunity offered whilst price remains above R125
Stop loss below R125
Various targets:
Short term 6-12 months
Medium term 12-24 months
Long term > 24months
Our opinion on the current state of ARM(ARI)African Rainbow Minerals (ARI) is a diversified mining company controlled by Patrice Motsepe, involved in a variety of mining ventures. Its interests include platinum group metals (PGM), iron ore, manganese, chrome, coal, and copper. It also owns 12.2% of Harmony Gold.
There has been some speculation about a possible acquisition. One possibility is an involvement in the Wafi-Golpu copper and gold resource, which is jointly owned by Harmony and Australian mining company, Newcrest. Harmony is looking for help in financing its share of the development cost of this massive resource—estimated at around R21bn—so ARM could potentially be part of that solution. The company is also looking for acquisitions of "green metals" mines that produce metals used in the move to avert climate change.
In its results for the year to 30th June 2024, the company reported headline earnings down 43%. The company stated, "The decline in headline earnings was mainly due to the decline in the average US dollar 6E PGM basket price and the lower thermal coal prices. This was partially offset by a weaker average rand/US dollar exchange rate and higher average realised export iron ore prices."
In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would fall to between 678c and 829c compared with 1507c in the previous period, "...due to a 22% reduction in average realised US dollar iron ore prices, lower iron ore and manganese ore sales volumes, higher cash costs and a stronger rand/US dollar exchange rate."
Technically, the share has been falling since July 2024 due to weaker commodity prices. We think that this is a good mining share that is gaining stability from its diversification into base metals—but it remains risky and volatile.
African Rainbow broken it's medium term downtrend - target R221Cup and Handle formed on African Rainbow for the first time since 15 September.
We are seeing strong signs of buyingbut this is still a Medium probability analysis as the
Price>20 below 200MA
The first target is set to R221.55
$JSEARI-African Rainbow Minerals: A New Road Map if 14662 HoldsSee link below for previous analysis.
Price continued higher to peak at 24476 cps after the previous analysis.
The strong sell-off broke below 15503 thereby invalidating the outlook.
Reason for optimism though is that the key invalidation level of 14662 still holds.
I am now looking at the large corrective structure as an expanded flat for wave 2.
For this outlook to remain valid, 14662 must continue to hold and to a lesser degree, 15263 could be a key bottom as well.
I am bullish above 14662 cps.
Our opinion on the current state of ARM(ARI)African Rainbow Minerals (ARI) is a diversified mining company controlled by Patrice Motsepe, engaged in various mining ventures, including platinum group metals (PGM), iron ore, manganese, chrome, coal, and copper. The company also owns a 12.2% stake in Harmony Gold, leading to some speculation about possible acquisitions or strategic partnerships. One potential acquisition could involve the Wafi-Golpu copper and gold resource, jointly owned by Harmony and Australian mining company Newcrest. Harmony is seeking financial support to cover its share of the development cost for this massive resource, estimated at around R21bn, and ARM could potentially be part of that solution.
In addition to this, ARM is looking for acquisitions of "green metals" mines—those that produce metals used in efforts to avert climate change, which aligns with the global move towards sustainability.
In its results for the year ending 31st December 2023, ARM reported a 43% decrease in headline earnings and net cash of R7,935m. Despite an 8% weakening of the average rand exchange rate against the US dollar and a 6% increase in export iron ore sales, the company faced challenges. ARM Platinum, in particular, experienced a significant downturn, with headline earnings 121% lower, resulting in a R282 million loss compared to R1,330 million in earnings for the first half of the previous financial year. This was attributed to depressed commodity prices and above-inflation unit cost increases.
In a trading statement for the year ending 30th June 2024, ARM estimated that headline earnings would decrease by between 40% and 50%. The decline in earnings was primarily due to a decrease in the average US dollar 6E PGM basket price and lower thermal coal prices.
Technically, the share has been declining since the beginning of 2023 due to falling commodity prices but may be nearing a bottom. ARM is a strong mining company with stability gained from its diversification into base metals. However, it remains a risky investment, especially if the board decides to venture into new areas like Wafi-Golpu, which would require significant long-term commitment.
$JSEARI - African Rainbow Minerals: The Short-Mid-Term Road MapSee link below for the long-term view.
Looking at price action from 14662:
The advance to 20300 is a leading diagonal for wave 1.
The correction to 15503 is a zig zag for wave 2.
The stock is now in the early stages of wave 3 which can only be a five wave impulse.
Waves {i to v} in green give the idealized road map for wave 3.
15503 is the secondary invalidation but 14662, as the primary invalidation level, is the level which will lead to the whole invalidation of this bullish outlook should price break below it.
$JSEARI - African Rainbow Minerals: The Big PictureThis is the first time of ARM.
The big picture is one of very volatile swings in price as can be seen by the points and percentage changes in price when the stock is in bear mode.
2005 to 2008 was a great bull market where all one had to do was buy and hold.
2008 to 2016 was a big bear market that unfolded in a three wave zig zag pattern.
The advance from 2016 to the all time high in 2023 was very choppy and I am tentatively labelling it as a large leading diagonal for a higher degree wave {1}.
With this tentative outlook, I am labelling the sell-off from 31900 to 14662 as wave {2}.
The correction for wave {2} is the third largest in points and looking at the V-bottom reversals in history, 14662 could be a significant bottom.
This bullish outlook will be invalidated by a break below 14662.
ARM has diversified operations in Iron-Ore, Coal, Manganese and Platinum (PGMs) but the fundamental outlook is beyond the scope of this analysis.
Our opinion on the current state of ARIAfrican Rainbow Minerals (ARI), under the leadership of Patrice Motsepe, stands as a notable diversified mining company in South Africa, with operations spanning across a wide range of minerals including platinum group metals (PGM), iron ore, manganese, chrome, coal, copper, and a strategic ownership stake in Harmony Gold. The potential involvement in the Wafi-Golpu copper and gold project, co-owned by Harmony and Newcrest, highlights ARM's interest in expanding its portfolio, especially considering Harmony's search for financial partners to develop this significant resource with an estimated development cost of around R21bn.
ARM's interest in acquiring "green metals" mines, which produce metals crucial for climate change mitigation efforts, aligns with global trends towards sustainable and responsible mining practices. This strategic direction not only diversifies ARM's portfolio but also positions the company at the forefront of the transition towards a greener economy.
For the fiscal year ending 31st December 2023, ARM reported a 43% decline in headline earnings, alongside a net cash position of R7935m. The financial year saw a weakened average rand exchange rate against the US dollar and a 6% increase in export iron ore sales. However, ARM Platinum faced significant challenges, reporting a loss of R282 million, a stark contrast to the previous period's earnings, primarily due to depressed commodity prices and above-inflation unit cost increases.
The share performance of ARM has been impacted by falling commodity prices since the beginning of 2023, indicating potential challenges ahead. However, the possibility of reaching a bottom suggests an opportunity for recovery and growth, especially given ARM's strategic focus on diversification and interest in base and green metals.
ARM's potential involvement in projects like Wafi-Golpu, coupled with its focus on expanding into metals pivotal for environmental sustainability, underscores the company's adaptive strategy in a rapidly evolving global mining landscape. While investments in new ventures such as Wafi-Golpu present inherent risks and require a long-term commitment, ARM's diversified portfolio and strategic focus on essential and sustainable metals could provide a stabilizing factor for the company.
Investors considering ARM as a potential addition to their portfolios should weigh the benefits of the company's diversification and strategic positioning against the risks associated with volatile commodity prices and significant capital investments in new projects. ARM's commitment to expanding its base and green metals portfolio, while risky, signals a forward-looking approach that could yield substantial rewards as global demand for sustainable and critical minerals continues to grow.
Our opinion on the current state of ARIAfrican Rainbow Minerals (ARI), under the leadership of Patrice Motsepe, is a diversified mining company with interests spanning across a wide range of minerals including platinum group metals (PGM), iron ore, manganese, chrome, coal, and copper. Additionally, it holds a significant stake of 12.2% in Harmony Gold. The speculation around a possible acquisition, particularly with Harmony's Wafi-Golpu copper and gold resource, co-owned with Australian mining company Newcrest, highlights ARI's strategic positioning. Given Harmony's search for financial partners to cover the development costs estimated at around R21 billion for Wafi-Golpu, ARI could potentially play a key role in this venture, aligning with its interest in expanding into "green metals" that are pivotal in climate change mitigation efforts.
For the fiscal year ending on 30th June 2023, ARI reported a 21% decrease in headline earnings per share (HEPS) and declared a final dividend of R12 per share. The company's performance was notably affected by logistical challenges that impacted the volumes of iron ore, manganese ore, and thermal coal. Additionally, the production costs have been under significant pressure due to reduced production volumes coupled with above-inflation increases in the costs of explosives, diesel, electricity, consumables, and maintenance.
Looking ahead to the six months ending on 31st December 2023, ARI anticipates a substantial decline in HEPS, estimated to fall between 40% and 50%. This forecast is primarily attributed to a 43% decline in the average US dollar price of 6E platinum group metals (PGM) and lower thermal coal prices, reflecting the volatile nature of commodity markets and their impact on mining operations.
The share price of ARI has been on a downward trend since the beginning of 2023, influenced by declining commodity prices. This trend underscores the inherent risks associated with the mining sector, particularly for companies like ARI that are exploring potential investments in new ventures such as Wafi-Golpu. While such investments could offer long-term benefits, especially in aligning with global efforts to combat climate change through the production of green metals, they also introduce significant financial commitments and risks.
In conclusion, African Rainbow Minerals presents as a potentially strong player in the mining sector, benefiting from its diversified portfolio. However, the company's future performance and stock valuation may be influenced by its strategic decisions, including potential acquisitions and investments in new mining ventures. Investors considering ARI should be mindful of the risks associated with the volatile commodity market and the implications of the company's strategic investments on its financial stability and growth prospects.
#ARI is African rainbow headed for further weakness?I hate to be the bearer of bad news but if we close below R169.00 on a closing basis I think African Rainbow could well trade much lower to a target of approximately R136.00. Not only is it currently losing a very important level of uptrend support but the R169.00 level has been an important pivot of resistance and support previously. Although the Head & Shoulder presented is a bit shady as the horizontal neckline is not at the same level, i do feel like a break of R169 will see the stock under pressure. Notice how it's lost its 200dma once again (green line).
African Rainbow Minerals Ltd is yet to break out from H&SAfrican Rainbow Minerals Ltd (ARI)
1.Price Formation: The price is posing to break out from an inverted H&S price formation on a daily chart.
2.Moving Averages: The 7-day moving average (MA) is above the 21-day MA, which is a positive sign indicating bullish momentum.
3.200-day Moving Average is below the Price.
4.Thus, Mas 7>21>200
5.Relative Strength Index (RSI): The RSI is > than 50, indicating bullish momentum and potential further upward movement.
6.Price Target: R280
African Rainbow Minerals Ltd (ARI) is a South African-based mining and minerals company. It operates in South Africa focusing on the exploration, development, and operation of mining and mineral interests. The company's business segments include ARM Platinum, ARM Ferrous, ARM Coal, and ARM Corporate. These segments cover a range of minerals such as platinum, nickel, iron ore, manganese, coal, and others. African Rainbow Minerals was incorporated in 1933 and is known for its substantial involvement in the mining industry.
ARI: heading lower again?A price action below 15500 suports a bearish trend direction.
Increase short exposure for a break below 14900.
The target price is set at 13500.
The stop-loss price is set at 16600.
Remains below its 200-day simple moving average as well as its 23.6% Fibonacci retracement level.
Remains a risky trade.
ARI: testing resistanceA price action above 16000 supports a bullish trend direction.
Crossing above 16800 will further confirm the bullish bias.
The target price is set at 17900.
The stop-loss price is set at 15000.
Testing major resistance. A break above this level might change the trend to a stronger bullish one.
Remains a risky trade.
Our opinion on the current state of ARIAfrican Rainbow Minerals (ARI) is a diversified mining company controlled by Patrice Motsepe, involved in a variety of mining ventures. Its interests include platinum group metals (PGM), iron ore, manganese, chrome, coal and copper. It also owns 12,2% of Harmony Gold. There has been some speculation about a possible acquisition. One possibility is an involvement in the Wafi-Golpu copper and gold resource which is jointly owned by Harmony and Australian mining company, Newcrest. Harmony is looking for help in financing its share of the development cost of this massive resource - which is estimated at around R21bn - so maybe ARM could be part of that solution. The company is looking for acquisitions of "green metals" mines that produce metals used in the move to avert climate change. In its results for the year to 30th June 2023 the company reported headline earnings per share (HEPS) down 21% and a final dividend of R12 per share. The company said, "Iron ore, manganese ore and thermal coal volumes were negatively impacted by logistics challenges. - Unit production costs remained under pressure due to lower production volumes and above-inflation increases in the costs of explosives, diesel, electricity, consumables, and maintenance costs". Technically, the share has been falling since the beginning of 2023 because of declining commodity prices. We think that this is a good mining share which is gaining stability from its diversification into base metals - but it remains risky, especially if its board decides to invest in a new area (like Wafi-Golpu) which involves extended commitment.
ARI ZA African Rainbow Minerals TAThis is my Technical Analysis on African Rainbow Minerals. ARI.ZA.JHB
So anyone can do a Chart based on history. But based on that HISTORY we all can Learn to see key POINT's where there where possible clues as to how we should've considered our Trades / Investments. {Grammar here Graham?}
The Chart I've shown is trying to predict {Impossible} entry points for the commodity using the Fibonacci principles of support or rejection.
If you are a SUB 35 Year old Investor, you have nothing to worry about as you have DEAR TIME on your hand - possibly an Apple or Samsung Watch. "JOKE".
However if you are a Retired Investor, my best Advice is to sit still for now until a new or better trend has been established. Never throw your hard earned children's inheritance at a declining asset.
Simple Mathematics shows you only accelerate your losses.
Simply STOP.
But Important - Do not SELL.
If you sell at a LOSS you are destroying your CAPITAL.
You will always own that stock.
The FEW exceptions' are if you believe the stock will go to ZERO or unless you can ensure better GAINS on a different Trade.
Things Change - Rather Wait.
Investing requires Patience.
No consideration for me here as I am also Guilty of making these same Mistakes, I am down some -10% this year.
I trust my Technical Analysis can Assist all who Study the same. PS I am busy learning the "Elliot Wave Principles" to further my knowledge.
Loyiso (Loyiso_BlaqueSoros_Mpeta) is quite an Expert in this Regard. Please follow him if he accepts your request. He also presents his knowledge on BD TV.
I trust my studies can assist all that view.
Kind Regards
Graham.
ARI falling wedge patterARI is now trading at the apex of its 4 month falling wedge pattern, a breakup and close above R202.00 see"s targets open up to R229.00
ARI - Buy zoneARI had a bit of a fakeout at the top of the range when it briefly breached 307, but has now pulled back nicely to proven area of support, 220 - 222 area. Stop loss is a close below both horizontal and TL lines.
African Rainbow Minerals - In area of supportARI has been trading in a larger range (220 - 307) for a while now and once again we see it close to the bottom of the range. Current price area offers both horizontal and TL support which makes it a good level to risk a long position.
TRADE UPDATE: African Rainbow Minerals - Lock in profits African Rainbow Minerals has been moving nicely in the downtrend.
It was only a few points away from the take profit, before the price turned up.
It's safe to move the stop loss above the trend line now as this will signal a change in trend to the upside.
This way, we can look for longs if the break occurs.
ARI vs Top 40 IndexAfrican Rainbow Minerals relative to JSE Top 40 Index (Weekly Chart). Noticed the multi-year incline being breached/at risk.
Lower panel. Ratio distance vs 200-w SMA contracting, signaling potential loss of LT momentum.
For more research insights (including trade ideas) get in touch today.
ARI - Waiting for buying opportunity African Rainbow was rejected at the top of the range (307) once again after a small fake-out. Ideally, would like to see it pull back to around the preferred buy zone (220-225 range)
ARI showing downside after a break below a strange patternI don't know if such a pattern exists but I call it a Reverse Cup & Handle.
This is where the Handle (small rounding top) is on the left side of the cup (Big rounding top).
Now that the price has broken below, we can expect supply side to bring the price down.
21>7>200 - Bearish
RSI<50
Target R219.52
ABOUT ARI
African Rainbow Minerals (ARM) is a South African diversified mining and minerals giant.
The company was founded in 2004 by Patrice Motsepe, a South African billionaire businessman and philanthropist.
ARM has interests in a wide range of minerals, including platinum, coal,
The company's platinum division, ARM Platinum, is the world's second-largest platinum producer.
ARM also has a 50% stake in Two Rivers Platinum, a joint venture with Impala Platinum Holdings.
There are over 11,000 employees with a Market cap of over R30 billion - Blue Chip
