Volume movers: 6 stocks rallying on abnormal volume on Monday

Stocks that have experienced a big jump in relative volume on Monday.

Stocks of interest

IMD: Post capital raise reversal

Catalyst: IMDEX successfully raised $224m at $2.20 or a 10.8% discount to its pre-raise share price. The proceeds will be used to acquire one of the world’s largest drilling technologies company, Devico.

Things to think about: The discount and dilution from a capital raise typically weighs on the company’s share price when it resumes trading. IMDEX managed to rally almost 15% from session lows and close in positive territory. This is rather uncommon.

IMDEX chart (Source: TradingView)

Mader: Breakout mode

Catalyst: From a technical perspective, Mader has been trading sideways for about three months. There were notable volume days on 21 October and 14 December 2022. It moved out of its trading range last Friday and has experienced another strong volume day on Monday.

Things to think about: If you look to the left hand side of the chart, Mader experienced a seven month long consolidation from March through to October 2022. It broke out on 21 October and within 2-3 weeks, pushed from the $3.00 level to the $3.80 level. It’s in the midst of another breakout so eyes on where it begins to see some resistance and/or exhaustion. 

Mader chart (Source: TradingView)

Zip: Life coming back to BNPL

Catalyst: Several beaten up tech names surged on Wall Street last Friday. Notably BNPL rival Affirm (+16.7%), Coinbase (+11.6%) and Block (+7.4%). There’s a little bit of a resurgence among BNPL names on Monday, with Sezzle up 31.5%, Splitit up 7.3% and Openpay up 6.0%.

Things to think about: Our Morning Wrap noted a chart from J.P. Morgan that showed the aftermath of unprofitable tech companies post dotcom bubble. The chart shows us that improving returns to shareholders and factors like free cash flow, profitability and return on investment will matter more going forward. 

Zip chart (Source: TradingView)

Aura Energy: Broad-based uranium rally

Catalyst: The uranium sector is experiencing a broad-based rally with larger cap names like Paladin Energy, Boss Energy and Deep Yellow up between 2.5% to 8.0% on Monday. But uranium spot prices remain subdued, sitting around US$48.8/lb.

Things to think about: Most ASX-listed uranium stocks have been trading sideways since September 2021. The sector has had its bullish moments (e.g. upward moves in spot prices, Japan reversing its nuclear phase-out policy, global energy crisis etc.) but stocks have largely continued to trade sideways.

Aura Energy chart (Source: TradingView)