Mining services companies

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By :  ,  Financial Analyst

The Global equities and commodities markets made yearly lows on the same day - 24th December 2018.

The following days and weeks have seen a co-ordinated recovery in commodities along with energy and equity stocks in general.

We saw the significant bounce in Australian financials after the release of the Royal Commission report. There has been little follow through in this sector, however the resource and energy sectors continue to find new 2019 highs.

The largest, BHP, is currently trading at 7 year highs and along with RIO trading at 10 year highs, has been supportive of bullish sentiment in general.

What the trader should notice is this expansion of positive sentiment has occurred on a global basis.

Resources and energy are leading the way in early 2019, so we could say that demand remains strong for the bulls even as prices also remain strong.

Let’s take a look at what keeps the resource companies on line and producing - the services companies have enjoyed a stellar run and enjoyed this current wave of bullishness.

NWH      NRW Civil and Mining, Action Drill & Blast, and AES Equipment Solutions. The Company's NRW Civil and Mining segment is engaged in the delivery of private and public civil infrastructure projects, mine development and contract mining, waste stripping and ore haulage supported by a mobile work force and a fleet of plant and equipment.

NWH   NRW Civil highlights the volatility pattern breakdown into the capitulation low followed by the higher low and bullish flag set during January 2019.

Currently the daily chart of NRW has a second bullish flag underway, a retest of resistance at $2.18 is expected on a price breakout above $2.10.

Relative strength, RSI, has moved below the 70 level and is currently turning higher. 

ASL,    Ausdrill Limited is an exploration and production drilling company. The Company focuses on providing a range of services to mining clients. It operates in four segments: Drilling Services Australia, Contract Mining Services Africa, and Equipment Services & Supplies.

ASL Ausdrill posted a double bottom pattern during the December January period with a series of higher lows following. Historical support resistance at $1.25 resulted is a strong move to $1.55.  The primary trend is up with a significant breakout over the $1.55 resistance. Currently price is consolidating at $1.60.

Traders could look for a retest of the $1.55 level as a potential long entry point with stops at $1.51. 

MND, Monadelphous Company's services include fabrication, modularization, offsite pre-assembly, procurement and installation of structural steel, tankage, mechanical and process equipment, piping, demolition and remediation works; multi-disciplined construction services; plant commissioning; electrical and instrumentation services; process and non-process maintenance services; front-end scoping, shutdown planning, management and execution; water and waste water asset construction and maintenance; irrigation services; construction of transmission pipelines and facilities; operation and maintenance of power and water assets; heavy lift and specialist transport; access solutions, and dewatering services.

MND Monadelphous also made the low in the final week of 2018 with a solid rally to form a consolidation range around the $15.00 level, and with a new breakout has again entered into a consolidation at this $16.60 level.

In the coming weeks look for a closing price over this $16.60 as an indication of higher prices.

The daily Relative strength Indicator, RSI, is moving along the “70” level and indicates strong momentum - as consolidation takes place this would be expected to weaken and traders should monitor this to remain above the “50” level as a sign of price strength. 

WOR     WorleyParsons Limited is a professional services business company. The principal activities of the Company consist of providing engineering design and project delivery services, including providing maintenance, support services and advisory services to sectors, which include hydrocarbons; minerals, metals and chemicals, and infrastructure. Its segments include Services, Major Projects, Improve and Advisian. Its geographic segments include Australia, Pacific, Asia and China; Europe, Middle East and Africa, and Americas. It offers a range of services from small studies to the delivery of mega projects. 
+34% YTD   PE 28

The volatility pattern from mid-2018 saw the price fall into the December lows with the following rally finding resistance at the $14.00 level. This level becomes the neckline of the now completed inverse head and shoulder pattern. The following retest in early February 2019 has set the support level for the current movement higher.

With the absence of resistance until $16.00 and the Primary trend showing higher highs, a retest of this level is expected. 

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