Charts for Lithium Co. Show It’s ‘Heading Higher’

Source: Clive Maund  (10/4/22)

In light of yesterday’s lithium results from Argentina Lithium & Energy Corp., expert Clive Maund takes a look at the 10-year, 15-month, and 6-month charts for the natural resource company to tell you his outlook.

Regardless of how many electric vehicles spontaneously combust in the near future, the charts for Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE) suggest that it is headed higher, possibly much higher, perhaps for reasons of its own such as (this added later) the company coming out with positive lithium results yesterday from its second drill hole at Rincon West.

We’ll start by looking at the long-term 10-year chart to get a “big picture” perspective on what’s going on with the stock.

Argentina Lithium & Energy Corp is therefore rated an immediate speculative Buy here.

On this chart, we can see that, following a massive spike higher in 2016 and a lesser spike higher in 2017, it went into a bearmarket that did more than erase all of the prior gains — it became almost worthless, dropping to about CA$0.04 at the lows of the giant Cup & Handle base that is delineated on the chart.

A year ago, it spiked dramatically higher to complete the right side of the Cup before slumping back to slowly complete the Handle part of the pattern, which price / volumen action just over the past couple of weeks suggests that it may now have done.

The 15-month chart enables us to examine in much more detail the entire Handle part of the pattern that formed following the spike a year ago.

As we can see, this Handle has taken the form of an orderly downtrend, and in recent months, it has become clear that a base pattern has been forming at the support above its lower boundary that we will now proceed to look at in more detail on the 6-month chart.

The 6-month chart looks most encouraging. First off, we can see that a fine Double Bottom has formed from early August along a line of support at the 20-cent level.

Next, we can see the persistent heavy buying that started to kick in about two weeks ago that has driven the Accumulation line strongly higher.

Lastly, we can see that, after declining steeply for months, the 50-day moving average has started to turn up and thus converge with the falling 200-day, which of course, makes a rally more likely.

The advance late in September brought it up to a band of significant resistance in the CA$0.26 to CA$0.28 zone, where it was entitled to pause, which is what it has done, but the positive price/volume action of the past couple of weeks with largish white candles and strong upside volume suggest that “something is going on” with this stock and that it won’t be long before it succeeds in breaking above this resistance which should lead to a larger move.

Argentina Lithium & Energy Corp is therefore rated an immediate speculative Buy here. The stock trades in good volumes on the US OTC market, where there has been a big increase in upside volume in recent weeks.

Argentina Lithium & Energy Corp.’s website.

Argentina Lithium & Energy Corp. closed at CA$0.27, $0.189 on September 30, 2022.

CliveMaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Disclosures:
1) Clive Maund: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Argentina Lithium & Energy Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

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