Litium stocks are on fire in January of 2021. No surprise, we flashed a bullish lithium forecast for 2021 right before it started, in the public domain! In January we realized a profit of 26% with a lithium miner in our Momentum Investing portfolio and we tipped a lithium miner (not part of the portfolio) that is up approx. 46% in the meantime. Even though we forecast lithium miners to continue to be wildly bullish in 2021 we also do expect a (healthy) retracement which will give us another chance to get in.
There are three fundamental drivers in the lithium mining space:
- Electric vehicles.
- Green energy.
- Lithium prices.
The first two materialized in recent months as evidenced by exploding stock prices.
The third one is now underway, and the chart below suggests a major reversal in the lithium price is now starting.
The lithium price was on fire in 2017, and came back down. It retraced 75% from is 2017/2018 top. After a reversal that took a year approx. to complete we see that the price of lithium is eager to move higher now, presumably driven by the demand for green energy and EVs.
Imagine what lithium stocks will do once the price of lithium goes up 50%, 100% … God forbid, may be 200 to 300%.
In our Momentum Investing portfolio we track commodities closely. We took a position in a lithium miner, and realized 26% profits in the month of January. We expect a retracement in February of 2021 which will present entry opportunities in top lithium miners.