Market analyst Regina Meani discusses Orica (ASX:ORI).
Orica began its story in 1874 by supplying explosives in the Victorian Goldfields. The company is now one of the world’s leading mining and infrastructure solutions providers and states that every day, all around the world, their people help sustainably mobilise the earth’s resources. Their 13,000 plus workforce includes engineers, scientists, technologists, operators and business specialists. Orica supplies on-site crew support for customers in surface and underground mines, quarry, construction, and oil and gas operations.
The share price for Orica (ASX: ORI $15.84) has led a volatile path from the late 1980s. During the eighties and into the nineties the price experienced lows around $2.90 and highs between $10 and $12.50. The price found a pivotal turning point at $3.57 in June 2001 which saw the price spiral higher to reach a peak price in June 2007 at $32.48. The climax to this mammoth rise saw the price top out and break its steep upward path to drop rapidly to a low at $10.22 in February 2009. The combination of support and a severely oversold register produced a quick recovery. The action faltered in its approach to the previous peak zone with the price experiencing several years of ranging between $21 and $28 before dropping initially to around $18 where it ranged back up towards $25. The ranging process failed to regain upward momentum and the price slid lower to find support and a turning point around $12 in June 2016. The subsequent recovery stalled in resistance around $21 and then more importantly along the downward trend line in November 2019 at $24.27.
The price was rebuffed and fell towards support finding a turning point with the downward spike on 26 February 2021 to $11.17. Since then, the price has been volatile in a broadening base which has allowed a test of the next main barrier zone in the $16.00-18.00 area. Once clear the price would gain the potential to head towards $20-22 and possibly towards the peak zone between $28.00 and $32.
The past week has seen the price begin to pause as it reached into the $16-18 barrier zone. Currently support is located close at hand at $15.70-80 and a drop beneath this could indicate a deeper pullback towards $14.80- $15.00. A deeper pullback may present buying opportunities, but traders and investors should utilise support and stop loss levels until the new upward path is established.