Sunstone Metals (ASX: STM) - Does This Chart Tell You Anything?

Across two years of Sunstone, the recent part of the chart has the shape of a stock that has stopped falling. This piece tests that shape with the measures a technical trader would use, explains each one as it goes, and says where the chart supports the impression and where it does not.

Patrick Duffy, Managing Director and Chief Executive Officer of Sunstone Metals, is presenting an update on the company and its exploration portfolio. That is why we are looking at Sunstone this week.

This is a Samso Chart Read. We take the share price on its own, ask what a reader would think looking at it, then test that against what the chart measures. There is no call here.

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HOW TO USE THIS PIECE

Every technical term is explained in plain English where it first appears, and all of them are collected again in the vocabulary box at the back. Numbers in square brackets, like [R7], are sources. The reference list at the end of the piece names the ASX announcement or data source behind each one.

1.00 THE IMPRESSION. A Fall, Then a Flat Patch

The chart draws prices on a consolidation-adjusted basis, meaning every price before the February 2026 share consolidation has been rewritten so the line does not jump at the event. Section 4.00 covers what that does. On that basis Sunstone ran from 15 cents to a closing high of 75 cents by December 2025, fell through the first half of 2026, and has closed between 16.5 and 21.25 cents since early July. At the right-hand end of FIG. 01 the fall has stopped, and the flat patch could be a floor forming or a pause on the way down. The sections below apply the measures that test it.

2.00 THE MEASURES. Every Measure but One Reads Sideways

TABLE 01 names each measure before giving its reading. The 20- and 55-session windows are the two breakout windows of the Turtle trading system, set out by one of its traders, Curtis Faith, in Way of the Turtle (2007) [R10]. They run roughly a trading month and a trading quarter.

The 50-day moving average is the average closing price over the last 50 sessions, and at A$0.1905 against a 19.5 cent close the price is 2.4% above it. The Average Directional Index, introduced by J. Welles Wilder Jr in New Concepts in Technical Trading Systems in 1978, the book that also gave the market the Relative Strength Index and the Average True Range [R8], measures how strongly a price is trending without saying which way. Later convention, not Wilder's, puts a trending market above 25 and a directionless one below 20. Sunstone's ADX reads 16.17, and the two halves are almost level, +DI at 21.06 against −DI at 19.29. The price has closed inside an 18 to 20.5 cent band for 35 straight sessions, back to 4 August [R7].

Those two halves changed places on the day this piece measures. On 18 September −DI led at 20.35 against 19.47, and on 21 September +DI leads at 21.06 against 19.29. The crossing of those lines is what carries direction in Wilder's system, and ADX is the separate measure of whether direction is worth reading at all. At 16.17 it says not much, so the cross is worth naming and not worth weighting.

All of that says the stock is going sideways, so the impression from FIG. 01 is right as far as it goes. Sideways on its own is not evidence of a floor. One qualification belongs with the ADX figure. It has been under 20 for only five sessions, it read 42.98 as recently as 2 July, and its median across the two years FIG. 01 draws is 30.77. The quiet is five sessions old and the trend before it was strong.

The 200-day moving average looks like it disagrees. It reads A$0.3494 with the price 44% below it and the line falling at 11.78% over 20 sessions, which, taken at face value, says the long trend is still falling. That slope carries almost no new information. The 20 sessions dropping out of the back of the window averaged 66 cents, the 20 coming in averaged 19.6 cents, and over the same period the price itself was up 2.63%. The line is falling because the December 2025 peak is dropping out of the window.

That window also spans the 29 June placement covered in section 3.00, which moved the price 17% lower in a session, so the average is drawn across a step as well as across a fall. The 50-day window is short enough to start after it. If Sunstone stays at 19.5 cents and never moves again, that line still has 130 sessions of falling left in it, about six months, before it reaches the price.

3.00 THE ANNOUNCEMENTS. The Announcements Behind the Two Spikes, and the One Behind the Fall

Two sessions stand out on the volume bars, the heaviest of the last twelve months and the third heaviest. The second heaviest was 30 June, the day after the first of them, so the two examined first are two separate events. Neither was the market changing its mind, and TABLE 02 sets out why. Volume is measured against its recent normal, the median of the previous 20 traded sessions. The median is the middle value rather than the average, so one very large day cannot drag the benchmark up, and halt days are left out because a session nobody could trade says nothing about a normal one. Both days came in at roughly seven times normal, 6.91 and 7.33, with outcomes a long way apart.

The 29 June session is a capital raising. Sunstone placed shares at 17.5 cents, a 14.6% discount to the last close of 20.5 cents [R3]. That close was struck on 24 June. Sunstone went into a trading halt on the 25th, a pause a company requests so an announcement can be released, and did not trade again until the 29th, so the gap down of 12.20% measures a reopening after the halt. The stock then closed at 17 cents, half a cent through the placement price.

The 9 September session is a drill result the company described as an exceptional high-grade zone [R5]. The stock opened 7.89% up, reached 22 cents during the day, and closed at 20 cents, giving back 9.09% from the day's high (FIG. 02). Seven sessions later, on 18 September, it was back at 19 cents, where it had closed on 8 September. The 176-metre intersection announced on 18 August [R4] closed its session unchanged.

Neither spike started a trend. The first reset the price to the placement. The second was bought for a session and sold back.

One more announcement came earlier, inside the fall, and never showed up on the volume bars. Sunstone released a scoping study for its Bramaderos gold-copper project on 21 April 2026, a scoping study being an early, low-precision test of whether a deposit could be mined at a profit [R11]. On 11 May the company retracted the study's production targets and forecast financial information, saying that following consultation with the ASX it did not have a reasonable basis for them, because of the proportion of Inferred material in the production target, Inferred being the least certain of the categories a resource is reported in. The same announcement states that the study's other material assumptions are unaffected [R12].

The stock closed at 42.5 cents on 27 April and at 30 cents on 20 May, a fall of 29%. Neither of those sessions was a heavy one, so a move that size happened without the volume bars marking it.

4.00 THE CONSOLIDATION. The Consolidation Rewrote Every Price Before February 2026

One thing on this chart is not price movement at all. That is the February 2026 step. On 22 January 2026 Sunstone announced a share consolidation, every 30 shares becoming 1, effective 23 February [R1] and completed on 6 March [R2]. A consolidation changes the number of shares, not the value of the holding. Two of the company's documents word the ratio differently. The announcements of 22 January and 6 March 2026 both call it a 30-for-1 consolidation [R1][R2], and Note 13 of the 2026 Annual Report calls the same event a 1-for-30 consolidation [R13]. The arithmetic is the same either way. 6,572,004,541 shares came off the register and 226,622,757 remained.

A holder of 30,000 shares at 1.7 cents, roughly where Sunstone dealt in the days before the event, held A$510 of stock before it and the same A$510 after, as 1,000 shares at 51 cents.

Price data providers back-adjust for it, multiplying each earlier price by 30 and dividing each earlier volume by 30, so the line stays continuous. That is correct, and it is why the chart no longer shows what anybody actually paid. Sunstone traded at half a cent in September 2024, and a two-year chart today prints 15 cents for that day (FIG. 03). Any shape drawn across February 2026 is drawn across an event that was not the market doing anything. The ratios in TABLE 01 survive this, because multiplying every old price by the same 30 leaves a percentage unchanged. The dollar levels do not. The 200-day average is blended out of prices that nobody dealt at, which is worth holding in mind whenever that line is read as a level.

5.00 TICK SIZE. The Tick, and Why the Daily Moves Look Bigger Than They Are

The tick is the minimum price step a security is allowed to move. The ASX sets it in bands [R6]. Up to 10 cents the step is a tenth of a cent, and from 10 cents up to A$2.00 it is half a cent. TABLE 03 gives the step as a percentage of the price.

At 19.5 cents one tick is 2.56% of the price. That is the smallest move the ordinary order book allows, so a 5.13% day is two steps. Over the last 60 sessions the median day has travelled two and a half ticks between its high and its low, 6.41% of a 19.5 cent close, so a two-tick move from one close to the next is about the ground a typical day covers.

From the first session after the consolidation completed, 9 March 2026, Sunstone has traded on 136 days to 21 September, giving 135 changes from one close to the next. On 131 of those days the close landed exactly on a half-cent step, 82 of the 135 changes were two ticks or fewer, and on 16 days the price did not move at all (FIG. 04).

The other five closes printed at a quarter of a cent, 19.25 cents on 31 August among them. A quarter of a cent is exactly half a tick, and the ordinary order book cannot form it. Some ASX trade types can, because one ASX Centre Point order type matches at the mid-point of the National Best Bid and Offer [R9], and the mid-point of a one-tick spread falls on a quarter of a cent. We have not established how these five were struck, and we have not counted them as steps.

Percentage moves on a cheap stock are therefore not comparable with those on a dear one. When Sunstone dealt at half a cent, one tick was 20% of the price, and a 20% day was a single tick.

6.00 FAILURE CONDITIONS. What Would Change This Reading

The reading is a stock going sideways, with no trend in either direction and both recent spikes explained by events. The band is not tight. On closes, 18 to 20.5 cents is five half-cent ticks, about 14% of the low. Three things on the chart would change the reading.

The first is a close above 20.5 cents, the highest close of the last 20 sessions, on volume several times the 20-day median, with the move held for more than one session. All three parts count, because 9 September was already a single heavy day that did not hold.

The second is a close below 16.5 cents, the lowest close of the last 55 sessions, which would say the sideways band had given way.

The third is ADX moving above 25, which would say a trend had started, still without saying which way, because that is what the +DI and −DI pair carries. ADX smooths 14 sessions of directional movement with a decaying weight on everything before them, so it lags and confirms a move that has already happened.

What none of those three does is tell a base from a pause while the price is still inside the band. The test that would separate them is volume behaviour on repeated visits to the bottom of the band. If each trip down to 18 cents draws less selling than the last, and a probe below it gets bought back the same day, a reader has evidence of a floor rather than a shape. That evidence is not on this chart yet, and it is what to watch for on any stock in this position.

6.10 THE LIQUIDITY CAVEAT. Very Little Money Draws This Chart

One caveat covers all three conditions and everything above them. It is how little money changes hands. Turnover is shares traded multiplied by the closing price. Median daily turnover over the last 20 traded sessions is A$79,742, and over the two years the median traded day turned over A$89,315. Halt days are out of both, on the same reasoning that keeps them out of the volume benchmark in section 3.00. The 20-day line in FIG. 05 has spent 47% of its time under A$100,000 and the rest above, and it is under it now.

For scale, DGR Global's substantial holding of 28,401,689 shares was 10.00% of Sunstone at 31 August 2026 [R13], which puts about 284 million shares on issue, Samso's arithmetic from those two figures, and the whole company at about A$55 million at a 19.5 cent close.

Turnover that low means a pattern is drawn by very little money, and it cannot carry the weight the same pattern would in a large company's stock. That applies to every small-cap chart, this one included. Eleven sessions in the two-year window carry no volume at all. Seven are trading halts, three fall inside a voluntary suspension in May 2025, and on 8 January 2025 the stock was quoted and nobody traded.

THE OTHER WAY TO READ THIS

A range can hold for a long time without resolving, and that is the flatter reading of the same chart. A stock 74% below its highest close of the last two years, a shade above its 50-day line and with ADX at 16, is a stock going sideways after a fall, and it is one of the most common shapes on the ASX junior board.

On that reading the 9 September session was what a market this small does with any news, which is to trade it for a day. The two-year return is still positive at 30.0%, and a stock that has held an 18 to 20.5 cent band for 35 straight sessions after a fall of that size has at least stopped being sold. Nothing measured above rules any of this out.

7.00 SAMSO CONCLUDING COMMENTS. The Fall Has Stopped, but a Range Is Not a Base

The impression at the right-hand end of this chart is half right. The fall has stopped, but what replaced it is a range, and a range is not yet a base. Nothing measured here tells the two apart. Over the full two years the price is up 30.0%, which describes none of the path, and the two sessions examined above were both events rather than turns.

SAMSO TAKE

A chart like this one is most useful for what it rules out, and it rules out a trend in either direction on every measure that describes the present, with the 200-day average explained above. Anyone reading the flat patch as a floor is reading something the chart has not shown. That does not make them wrong.

It does mean the evidence has to come from somewhere other than this chart. So the question a reader is left with is whether they are prepared to wait for that evidence to appear.

THE WORDS IN THIS PIECE, IN PLAIN ENGLISH

Moving average. The average closing price over a set number of recent sessions, redrawn each day. The 200-day version is the line most widely watched as the divide between a long uptrend and a long downtrend, and the 50-day is the shorter-term version of the same idea.

ADX. The Average Directional Index, introduced by J. Welles Wilder Jr in New Concepts in Technical Trading Systems in 1978, the book that also gave the market the Relative Strength Index and the Average True Range. It measures how strongly a price is trending and says nothing about which way. It smooths 14 sessions of directional movement with a decaying weight on everything before them, so it lags. Later market convention, not Wilder's, puts a trending market above 25 and a directionless one below 20. ADX is built from two halves, +DI for upward pressure and −DI for downward, and the two are worth reading alongside it.

Range. The band between the highest and lowest price over a set number of sessions. A price moving inside its range is going nowhere in trend terms, whatever the day-to-day moves look like. This piece measures ranges on closing prices.

Base. A stretch of sideways trading that a later rise starts from. Every base is a range while it is forming, but most ranges never turn into one, and the difference is only visible afterwards.

Trading halt. A short pause in trading, normally no more than two trading days, that a company requests so it can release an announcement. A voluntary suspension is the longer version, used when the matter cannot be settled inside that time.

Median. The middle value in a list. It is used here in place of the average because one very large day would drag an average up and leave every other day looking quiet by comparison.

Turnover. Shares traded multiplied by the price, so a dollar figure rather than a share count. It measures how much money actually changes hands.

Opening gap. The distance between a session's opening price and the previous session's close. Where a trading halt falls between the two, the gap spans the halt and is a reopening rather than an overnight move.

Tick. The minimum price step a security is allowed to move on the exchange. The ASX sets it in bands, so a cheaper stock moves in smaller steps and a dearer one in larger.

Share consolidation. Replacing a number of shares with fewer shares of proportionally higher value. Sunstone replaced every 30 shares with 1. The value of the holding does not change.

Back-adjusted. A price history rewritten so a consolidation does not leave a step in the line. Every price before the event is multiplied, and every volume divided, by the same ratio.

Placement. New shares issued to selected institutional and sophisticated investors, usually at a discount to the market price, to raise cash quickly.

Scoping study. The first and least precise of the study stages an explorer works through, a broad test of whether a deposit could be mined at a profit. Its numbers carry wide error bars and it is not a decision to build anything.

Inferred resource. The least certain of the categories a mineral resource is reported in, estimated from enough drilling to be confident the material is there but not enough to be confident of its tonnes and grade.

References and sources

The bracketed numbers through the piece point here. Every announcement below is on the ASX company announcements platform under the code STM and can be opened directly. Prices are stated as at 21 September 2026. Figures 01 to 05 are original Samso illustrations drawn from the price data, not company material, and where a calculation is Samso's, the caption says so.

[R1] Sunstone Metals Limited, "Share consolidation to assist ongoing capital management and corporate discussions", ASX announcement, 22 January 2026, indexed on the announcements platform as "Share Consolidation". It states the ratio as 30-for-1 and its indicative timetable gives 23 February 2026 as the effective date and 24 February as the last day of pre-consolidation trading. PDF

[R2] Sunstone Metals Limited, "Share consolidation completed", ASX announcement, 6 March 2026. PDF

[R3] Sunstone Metals Limited, "Strategic resources investor DGR Global to take 10% stake in Sunstone as part of $10 million equity raising", ASX announcement, 29 June 2026, indexed on the announcements platform as "Sunstone raises $10M in share placement", which is the headline quoted in TABLE 02 and FIG. 02. It prices the placement at $0.175 a share, "representing a 14.6% discount to the last close price of $0.205". PDF

[R4] Sunstone Metals Limited, "Drilling returns 176m gold-copper intersection", ASX announcement, 18 August 2026. PDF

[R5] Sunstone Metals Limited, "Drilling hits exceptional high-grade zone", ASX announcement, 9 September 2026. PDF

[R6] ASX Limited, "Australian equities trading", minimum price steps table for equity securities, giving 0.1c up to 10c, 0.5c from 10c up to A$2.00, and 1c from A$2.00 and above. Page last modified 14 July 2026, retrieved 21 September 2026. Page

[R7] Yahoo Finance, daily price and volume bars for STM.AX, the data provider's symbol for ASX code STM, 20 September 2024 to 21 September 2026, retrieved 21 September 2026. The series is consolidation-adjusted by the provider.

[R8] J. Welles Wilder Jr, New Concepts in Technical Trading Systems (1978), the original definition of the Average Directional Index. The 20 and 25 thresholds used in this piece are later market convention and are not Wilder's.

[R9] ASX Limited, ASX Centre Point customer brochure, March 2025, which states that non-displayed liquidity is "matched at the mid-point of the National Best Bid and Offer (NBBO)". PDF

[R10] Curtis Faith, Way of the Turtle (2007), the account by one of the original Turtle traders of the system's two breakout windows, 20 sessions and 55 sessions.

[R11] Sunstone Metals Limited, "Bramaderos Gold-Copper Project Scoping Study", ASX announcement, 21 April 2026. PDF

[R12] Sunstone Metals Limited, "Retraction: Bramaderos Gold-Copper Scoping Study", ASX announcement, 11 May 2026, indexed on the announcements platform as "Retraction announcement of scoping study". PDF

[R13] Sunstone Metals Limited, Annual Report 2026, lodged with the ASX on 18 September 2026. Note 13, Contributed equity, carries the consolidation line. The ASX Additional Information section, shareholdings as at 31 August 2026, carries the substantial holding.

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