Don't Ignore This Chart

Lithium ETF (LIT) Looks Bearish


This morning I saw a commercial for the Global X Lithium ETF (LIT), and I thought, "Hmmm, lithium . . . batteries for iPhones, MacBooks, etc." So I pulled up a chart of LIT, and all kinds of things jumped out at me.

First I saw the parabolic advance that got so steep it collapsed. Next there is the snapback rally that had price back to the previous high, at which point it backed off to form a double top.

The PMO formed a negative divergence, which compares equal price tops to a lower PMO top.

The OBV has formed a reverse divergence, which compares equal price tops with a higher OBV top. What this tells us is that there was an internal blowoff when higher OBV could not push price above the previous price top.

Finally, there was a negative divergence formed when daily volume bars on the upward price push in October showed fading support relative to the higher volume shown in September.

This chart is very bearish.

Happy Charting!
- Carl

Technical Analysis is a windsock, not a crystal ball.

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Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)


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Carl Swenlin
About the author: is a veteran technical analyst who has been actively engaged in market analysis since 1981. He was the founder of Decisionpoint, one of the web's premier market timing and technical signal services, which was acquired by in 2013. Carl has contributed his market commentary and expert analysis to StockCharts since then. He is a Member of the CMT Association. Learn More
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