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:
LIT (Daily)
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:
LIT (Weekly)
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.
Read also: This Sector Could Be The Investment Story of 2016
Disclaimer
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Do your own due diligence and consult a licensed investment advisor prior to making investment decisions.