On the stock level, I am currently looking for ideas that have no/little correlation to the ASX – and PDN certainly flits that particular bill after retreating over the last year while the ASX200 has posted new all-time highs. Although last week’s June quarter update disappointed the market, again, we feel it was a case of “under-promise & over-deliver”, and buying will return into further weakness, although trading stops remain tight for obvious reasons in this contrarian move.
- I believe the risk/reward towards Paladin (PDN) is attractive if we see a spike lower early this week, following last week’s disappointing update.
Trade Idea: Buy Paladin Energy Ltd (PDN) at $6.80 with stops at $6.45 – 5% risk.
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