Don't Ignore This Chart!

Lithium ETF (LIT) Looks Bearish

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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


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Carl Swenlin
About the author: is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of DecisionPoint.com, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and blog contributor. Learn More
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