Iluka Resources (ILU) is a leading producer of zircon and high-grade titanium dioxide feedstocks. With projects and operations in Australia and a globally integrated marketing network, the company also has established a significant position in rare earth elements.
“ILU shares are now trading on a 1-year forward P/E multiple of approximately 10x, which we do not consider to be overly demanding. “Importantly, it has some positive catalysts over the short-to-medium term.
“In terms of the chart below, ILU had been consolidating back in a clearly defined channel since peaking in August.
“A few days ago, it broke higher, triggering a buy signal and leading to a rally up towards the August high.
“Now that’s getting close to the August high, it is too late to chase it here.
“If we can see it consolidate by moving sideways for a few days or so, then that “cooling off” would be the right time to buy.
“A sideways consolidation would then set it up for another strong rally.
“Any sharp pullbacks from here would be a negative sign,” Michael said.
ILUKA RESOURCES (ILU)
