Hi all, here's a gaggle of charts with a few comments.
Although demand appeared over the last two weeks to provide stubborn support starting at $1.285, and more green bars started to appear as momentum began creeping up, there was no clue that Friday would produce the largest single day move in the history of LTR. It's not like the move up came with no forewarning, however the magnitude of the move was surprising. And after a few months of basically moving with a basket of Lithium stocks, on Friday LTR violently broke away from the pack- an anomaly that's worth having a look at.
First though the daily chart. A bullish change of behaviour over the last few weeks, from 1 in 5 up days three weeks ago, to 3 in 5, to this weeks 4 in 5 as price found demand right in the slender volume shelf formed since the beginning of the year and registered a bullish momentum divergence on Friday 24th. This week price moved strongly through the yellow egg zone before Friday's crazy move. On Friday I thought price may get tangled up between the 200EMA and 50EMA but it blasted straight through. Well not exactly- once price got past the 50EMA at about 10.20am, it took another couple of hours to get above the 200EMA at about 1pm before accelerating away again. The next level above to conquer is the recent high of $1.68 and there's another volume shelf right through to $1.795 which has previously proven to be an area of supply. It couldn't just blast through that this week could it? Now that would be a little bit exciting. Looking for something immediately bearish is difficult, but the possibility of Friday being the first of a multi-bar Upthrust (reverse shake-out) is about worst case I can think of. However there is no clue in the trading to indicate that is about to eventuate, and it's best to take the price action at face value in these cases until something happens to suggest otherwise.
It might be worth having a look at how LTR has performed against some other Lithium stocks this year and compare that with how other stuff you dig out of the ground has gone also. After all, there is more chance of a sustained move up for LTR if there is some tailwind provided by a sector wide move up. Here's LTR compared to some other Lithiums and the AUD/USD since 3rd Jan which was around the low for many Lithium stocks and the AUD. The end of Jan marked most of the Lithiums topping and after Friday 24th Feb the downward move in the AUD was halted, at least temporarily which can be an indication that sentiment towards commodities is potentially improving as money flows in to Australian commodities again.
The next chart is the same comparison but showing only from 30th Jan to show how closely the Lithium stocks were correlated with each other and the AUD/USD. All except AGY which had a nice upwards spurt at the beginning of February while the others were dropping.
The next comparison of some popular ETF's shows how closely correlated all the miners are with each other and again the AUD/USD. Could we be seeing the beginning of a rotation back in to this sector?
For a wider view, here's the weekly chart which after only recently looking like it wanted to have a look down at the the $1.185 level, has turned around and put in a higher low. Above $1.68 will register a higher high and interrupt the short term down trend.
And an even wider view with the boring old Monthly chart, which with the last completed bar showing a low volume move down within the longer term sideways move.
Hmmm, compared to only a couple of weeks ago there are more green shoots appearing across the board, but still early stages. Could be a few opportunities present themselves if it doesn't all suddenly fall apart!
Good luck all, Rooster
LTR Price at posting:
$1.63 Sentiment: Hold Disclosure: Held
(20min delay)