US and Canadian markets settled this week on a mixed note, Two stocks to consider – FL, SPRB

Company Overview: Frontier Lithium Inc. (TSXV: FL) focuses on acquiring, exploring, and developing mining properties. The company holds a significant land position in electric avenue, part of Ontario's emerging premium lithium-metal district, located within the Canadian Shield in northwestern Ontario. Spruce Biosciences Inc. (NASDAQ: SPRB) is a late-stage biopharmaceutical company dedicated to the development and commercialization of innovative therapies for rare endocrine disorders. The Report covers the Price Action, Technical Indicators Analysis along with the Stop Loss Levels, Target Prices, and Recommendations on these two stocks. 

Global Markets Wrap-Up 

On February 20, 2025, the S&P 500 index closed at 6,117.52, reflecting a modest week-to-date (WTD) gain of 0.05%. In contrast, the tech-heavy NASDAQ Composite saw a slight decline of approximately 0.32% on a WTD basis, settling at 19,962.36. Meanwhile, the Russell 2000 ended the day at 2,261.74, marking a loss of roughly 0.80% for the week.

Considering the Canadian market, the benchmark S&P/TSX Venture Composite Index (TSX: ^JX) started the week on a positive note and continued the momentum. On February 20, 2025, the index closed at 644.10, marking a week-to-date (WTD) gain of 0.60%. Sectors such as Basic Materials, healthcare, financials, and energy led the charge, contributing to the overall positive performance. However, technology, consumer cyclicals, consumer non-cyclicals, industrials, and real estate lagged on Thursday, showing weaker performance relative to the broader market.

Considering the US and Canadian markets’ performance over the week, following the significant global macros and data front, two stocks that fit the criteria on the technical framework: Frontier Lithium Inc. (TSXV: FL) and Spruce Biosciences Inc. (NASDAQ: SPRB). The recommendations on these stocks are based on the generic insights, entry price, target prices, and stop-loss for the next 2-6 weeks:

Frontier Lithium Inc. (TSXV: FL)

Noted below are the key price indicators for the stock:

Price Action Analysis (On the Daily Chart)

On the daily chart, FL stock is currently holding above the breakout level of the falling trendline, signaling the possibility of upward momentum in the near future. The next key resistance level is around CAD 0.636, which the stock may test within the next 2-6 weeks. If the price manages to break above CAD 0.636, it could attract additional buying interest, potentially pushing the stock higher.

Technical Analysis (On the Daily Chart)

On the daily chart, the 14-period Relative Strength Index (RSI) stands at approximately 77.58, signaling strong positive momentum. Weekly trading volumes further support the potential for an upward move. Additionally, the current market price (CMP) is trading above the 21-period Simple Moving Average (SMA), a key trend-following indicator that may serve as a dynamic support level, reinforcing the bullish outlook.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Frontier Lithium Inc. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. The summary of recommendations is as follows:

Spruce Biosciences Inc. (NASDAQ: SPRB)

Noted below are the key price indicators for the stock:

Price Action Analysis (On the Daily Chart)

On the daily chart, SPRB stock is maintaining its position above the falling trendline breakout level, indicating the potential for further upward momentum. The next key resistance level is around USD 0.501, which the stock may test within the next 2-6 weeks. A decisive breakout above this level could attract increased buying interest, potentially fueling a continued uptrend and extending the stock’s upward movement.

Technical Analysis (On the Daily Chart)

On the daily chart, the 14-period Relative Strength Index (RSI) is currently around 61.81, indicating positive momentum. Weekly trading volumes further support the potential for an upward move. Additionally, the current market price (CMP) is trading above the 21-period Simple Moving Average (SMA), a key trend-following indicator that may serve as a support level, reinforcing the bullish outlook.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Spruce Biosciences Inc. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. The summary of recommendations is as follows:

Investment decisions should be made depending on an individual's appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report.

Upcoming Major Global Economic Events 

Market events occur daily depending on the data's frequency and generally include updates on CPI, PPI, Core Retail Sales, Unemployment Data, etc. The upcoming week's major global economic events that could impact the S&P/TSX Venture Composite Index and listed stocks' prices are noted below.

Related Risks: This report may be looked at from a high-risk perspective and recommendation is provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Kalkine reports are prepared based on the stock prices captured from either REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’ 

Note 1: Individuals can consider exiting from the stock if the Target Price or Stop loss mentioned as per the technical analysis has been achieved and subject to the factors discussed above. 

Note 2: How to Read the Charts?

The Green color line reflects the 21-period moving average, while the red color line indicates the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black color line in the chart's lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.

The Blue color bars in the chart's lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume. Liquidity in stocks helps in easier and faster execution of the order.

The Orange color lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: In general, it is a level to protect further losses in case of unfavorable movement in the stock prices.

Risk Reward Ratio: The risk reward ratio is the difference between an entry point to a stop loss and profit level and the report is based on ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favorable movement in the price to protect the gains. Individual can Trail the Stop-Loss as per the levels if the stock price achieves more than 50% of the Target 1. Individual should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, currency, technical indicators, support, and resistance levels is February 20, 2025. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

CAD: Canadian Dollar

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individuals. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.