Lithium Tech Stock on the Verge of an Imminent Break Out

Source: Clive Maund  (1/26/24)

Technical Analyst Clive Maund takes a look at Lithos Energy Ltd.’s 1-year and 6-month charts to explain why he believes it is a Strong Buy. 

Lithos Group Ltd. (LITS:CBOE.CA;LITSF:OTCQB) looks set to commence a major bull market as it is on the point of breaking out upside following a long period of consolidation.

The 1-year arithmetic chart gives us an overview of the stock’s history from when it started trading last February following a restructuring or reorganization of the company. On this chart, we see that immediately after it started trading early in February, it went into a small Pennant consolidation that led to a significant advance for about two weeks, but after that, it ran off into a long period of consolidation that, apart from a rally into early September that was completely reversed, has continued right up to the present.

Throughout this consolidation, the Accumulation line has been trending steadily higher, which is a strong positive divergence suggesting that a new bull market phase is incubating. The downtrend from the ephemeral early September peak gradually eased with the price finding support and stabilizing at the strong support level in the CA$0.52 – CA$0.54 zone, which marks the lower boundary of the trading range.

Now, we will proceed to look at recent actions in more detail on a 6-month logarithmic chart, which makes it easier to see what is going on.

On the 6-month chart, we see that the decelerating downtrend from the early September peak has taken the form of a 3-arc Fan Correction. While you can have more than 3 arcs, generally, once the price breaks above the third fanline, especially if there is marked diminution in downside momentum, which the MACD indicator climbing back to the 0 line shows to be the case, it normally marks the completion of a reversal and the start of a new bullmarket — and the price is now close to breaking above the third fanline.

The probability of Lithos Group breaking out into a new bull market soon and probably very soon is greatly enhanced by the strongly bullish volume pattern, especially recently — we can see the persistent heavy upside volume so far this month that is driving the Accumulation line to new highs as the price approaches the completion of a bull Flag or Pennant that has formed in the vicinity of the 50-day moving average which is now turning up.

So a very important breakout looks imminent, and it will be very important because it will involve a breakout from the Pennant, a breakout above the third fanline of the Fan correction, and a breakout above the nearby quite strong resistance level shown all at about the same time. It will thus have great technical significance and should mark the start of a major bull market in the stock.

Lithos Group is therefore rated a Strong Buy for all timeframes.

Lithos’ website.

Lithos Group Ltd. closed at CA$0.61 on January 19, 2024.

Important Disclosures:

1. [Lithos Group Ltd.] is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Lithos Group Ltd.
3. Street Smart, an affiliate of Streetwise Reports, has compensated Clive Maund, sole proprietor of clivemaund.com, for writing this article. However, the views, opinions, analyses, and any recommendations in Maund’s article are solely his own personal views, opinions, analyses, and recommendations, and are expressly not those of Street Smart or Streetwise Reports. The content created by Maund are about companies he believes in based on his personal investment opinions and analyses, and his opinions and analyses are not influenced or dictated by Streetwise Reports or its affiliates or as a result of compensation provided by Street Smart.
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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. 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.