originally published Friday, January 26, 2024

Lithium Stocks Lithium Stocks

We did a nice little trade in Lithium South around the New Year but took profits too early as had we hung on a little longer we could have gotten out with more. Nevertheless, the reasoning has been proven correct as the falling 200-day moving average killed the rally and sent it back down towards where it came from. At the time we sold we were aware that it could advance a little more and at the time we resolved to buy it back again after a reaction if the setup looked good.

As it happens, the setup looks better than good – it looks excellent. For looking at the latest 3-month chart, which shows recent action in detail, we see that the volume pattern is exceptionally bullish with persistent heavy volume driving the early December rally, following a “head fake” false breakdown from the Triangle that we correctly identified at the time, with a dramatic contraction in volume as the price has reacted back to quite strong support above the now rising 50-day moving average with the Accumulation line remaining elevated. All of which suggests that this reaction back is a bull Flag / Pennant that will be followed by another upleg that could be steep.

Lithium South is known to be in possession of very valuable lithium assets and it is suspected that the heavy buying early in December was either the work of predators building a position ahead of a possible takeover or speculators calculating that a buyout is in the offing at some point, or a combination of the two.

Lithium South is therefore rated a strong speculative buy at this juncture. While there are no guarantees that there will be another upleg – there are no guarantees of anything in this business - it does nonetheless look highly probable that we will see another upleg develop shortly, an upleg that could be BIG.

Lithium South Development Corp website

Lithium South Development Corp., LIS.V, LISMF on OTC, trading at C$0.36, $0.273 at 2.20 pm EST on 26th January 24.

Posted at 2.25 pm EST on 26th January 24.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment or securities advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market technical analyst, Clive Maund is not a Registered Investment Advisor or Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.