Mish's Market Minute

Technical and Fundamental Analysis on Lithium

Mish Schneider

Mish Schneider

Director of Trading Education, MarketGauge.com

Most associate lithium with EV usage.

The largest holding in the Global X Lithium ETF (LIT) basket is Albemarle Corp. (ALB). The US-based company isn't purely a lithium business. It also produces chemicals related to petroleum refining and consumer electronics. Interestingly, Tesla (TSLA) is a holding in LIT and ALB, only with about ½ the percentage of weight.

Factoid: Lithium, the drug, is made from lithium, the metal.

Besides use in EVs, lithium-ion batteries are the key to rechargeable power for laptops, phones, and other digital devices.

Expectations for longer-term demand support a rebound as government incentives to switch to EVs. Some forecast lithium demand by 2040 will be 16 times higher than present-day.

Is LIT a buy?

On the daily chart, the 200-day moving average (MA) is above the 50-day MA, and the price is in between. That is a recuperation phase or one of hope. The slopes on both MAs are slightly negative, but not by too much. I particularly like the risk right now. The low of the day LIT cleared, the 50-day MA or 60.90 should hold.

On the Real Motion Indicator, there is a bullish divergence. The momentum is above the 200-day MA, while the price is still quite far. That is typically bullish for the instrument.

On Tuesday, May 16, LIT is having an inside trading day, or trading within the range of Monday. That means pause or uncertainty. We will be looking for a weekly close around or just above current price levels, as patience is the key in current conditions.

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May 18th: Presentation for Orios VC Fund, India

May 19th: Real Vision Analysis

May 22nd: TD Ameritrade

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ETF Summary

  • S&P 500 (SPY): 23-month MA 420; support 410, then 405.
  • Russell 2000 (IWM): 170 support, 180 resistance.
  • Dow (DIA): 328 big support to hold.
  • Nasdaq (QQQ): 329 the 23-month MA and big caps trying hard.
  • Regional Banks (KRE): 42 now pivotal resistance-holding last Thurs low.
  • Semiconductors (SMH): 23-month MA at 124--can it hold next 2 weeks?
  • Transportation (IYT): 202-240 biggest range to watch.
  • Biotechnology (IBB): 121-135 range to watch from monthly charts.
  • Retail (XRT): 56-75 trading range to break one way or another.

Mish Schneider


Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More