Earlier today on CEO Chat I was asked by @Allan what my favorite “breakout stocks” are right now:
So I decided this would make for a good blog post. In addition, given the recent consolidation/pullback we have seen in many lithium explorers I think it’s a good time to focus on some of the most attractive companies/charts in this sector.
As I mentioned on the chat stream at the top of my list is Lithium X (LIX.V – $C110 million market cap):
The breakout from the 3-month descending triangle targets C$2.60+ and the volume profile confirms the recent upside trend. This is an impressive breakout. I see short term support near C$1.80 with some minor resistance near C$2.15.
I also like the volume and price action profile of Lithium Americas (LAC.TO – $C278 million market cap):
LAC has followed a constructive stair-step uptrend throughout 2016 and recently found support near the rising 50-day simple moving average. Today’s low (C$.87) now becomes an important reference point with new highs quite possible as the uptrend resumes.
Wealth Minerals (WML.V – C$58 million market cap) shares many similarities (albeit at roughly 1/5 the market cap) to LAC including the importance of the C$.87 price level:
WML has seen strong accumulation in the C$.75-C$90 area in recent months and a breakout above C$1.06 would target C$1.40+.
While the first 3 charts I have highlighted are all top tier lithium explorers with decent sized market caps (all are C$50 million+), I thought I would offer a fourth chart of a sub C$10 million market cap lithium/cobalt play that could potentially experience much larger percentage gains than its heftier peers, Scientific Metals (STM.V – C$9 million market cap):
The STM chart also shows solid accumulation since April (high volume up days) with a major support level at C$.07 which also happens to be the 50% retracement of the April-May advance. Above C$.10 STM shares could quickly see fresh highs.
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. The stocks mentioned in this article are high-risk and not suitable for most investors.. Consult the companies’ SEDAR profiles for important risk disclosures.
EnergyandGold has been compensated to cover Scientific Metals Corp. (STM.V) and so some information may be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
This article contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, standard transaction risks; impact of the transaction on the parties; and risks relating to financings; regulatory approvals; foreign country operations and volatile share prices. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.