..as I had predicted on this thread, it was only a matter of time that the 3 lithium stalwarts (PLS/MIN/LTR) catch up with their peers to the downside.
On the 5 year MIN chart, you can see that its LT uptrend trajectory from 2020 lows has been violated and the stock is about $1 away from testing its $55.20 support. My X-mas theory suggest that MIN could have further to go south to complete its X-mas base at $43.30 implying -23% downside risk, but of course it also depends on where iron ore goes too, as MIN is both iron ore and lithium.
..I had mentioned previously that an abyss was waiting for PLS. Today, it hit a 52-week low and has declined -25% the past month. At today's price, it remains valued with a premium, trading at 2025 PE of 40.8x at SC6 US$1400/MT using Bell Potters model. The stock could scale down to $2.90 with an eventual stop at $2.10 for X-mas completion, implying a potential -31.8% downside.
LTR has a strong following, the belief is strong because it is on the cusp of going into production. But as I said, that's a known news which adds to nothing other than buoying the faith. What is more pertinent is its ability to convince the bankers with its financial model that it is in position to finance its loan, the drawdown of which is expected for second half of this year. The SC6 price which it gets for its offtake will also be important to fund operating cashflows, otherwise a project de-risk could involve a discounted CR. Instos caught subscribing earlier CR could decide to offload before such eventuality.
A 89.5-90c support is likely to be tested, a breach below that level would signify a probable CR offing in the works. A breach would take to it to 80c but if lithium stocks were to fall another circa -30% (in line with PLS and ALB southbound trajectory), we could see LTR between 50c-66c in the medium term.
LS — TradingView
