The lithium sector breakout gained more steam today with the lithium exchange-traded fund LIT rallying 2.65% and rising for the 8th consecutive trading session:
Volume has poured into this relatively thinly traded ETF in the last week and fund net assets under management have grown by more than 10% in the same time frame (from a relatively small base of less than $50 million).
Meanwhile, the weekly chart shows a breakout above a longer term downtrend as price runs into important support/resistance near $24:
A classic failed breakdown with bullish momentum divergence took place in February. Price hasn’t looked back since!
We have been all over the lithium space as one of the major investment themes for 2016. However, one must now wonder if we are transitoning from the optimism phase of the rally to the euphoria phase (parabolic price action) – if this is the case then it means some extraordinary gains could occur over the next few weeks just before a major correction takes place.
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