As we are working on our annual lithium forecast, part of a series of 2023 forecasts, we notice that the price of lithium is breaking out to new ATH. It is even do so in a pretty aggressive way. This should not come as a surprise to InvestingHaven readers because we have been vocal for a long time that lithium is the most powerful market.
Back in July, before the summer rally started, we wrote that lithium was the only commodity not impacted by selling pressure. We mentioned that lithium stocks were impacted, but not the lithium price. Our viewpoint was that this would come with an epic buy opportunity in lithium stocks.
Early September, we followed up with this post: Australia Looks Good But ‘Big Lithium’ In Australia Looks Astonishing. The point we made:
The link between Australia and lithium is very simple: the most ‘juicy’ lithium plays in the world trade on the ASX. While there is much more to be found in Australia, in terms of sectors, than lithium, it is important to note that the Australian stock index is among the strongest worldwide. It trades 10% below its 2021 highs while most other indexes are closer to 20% below their 2021 highs. This certainly has to to with the fact that Australia’s index is rich of green battery metals.
Again, this suggests that there is a buy opportunity in lithium miners. Whenever the market decides to set a bottom we see lithium move aggressively higher, although not all of them concurrently. In our Momentum Investing updates we cover the ‘logic’ that the lithium market is tracking, there is structure in the lithium space.
At this very point in time we can only conclude, based on the ‘lithium spot’ chart shown below, that the single biggest opportunity in the market is to be found in the lithium space. There is not any market that has a similarly strong setup, there is not any market that trades at ATH, above the highs of 2021 and 2022.
Our Momentum Investing team published a lithium stock selection, based on a very thorough analysis of the lithium market. We bring in structure and logic that the lithium market is following. Our update was shared with premium members on October 21st “Lithium & Graphite top stock selection” available in the restricted area of Momentum Investing members!