Elon Musk has once again put a spotlight on electric vehicles, although this time it is for his erratic behavior rather than his visionary spirit. Be that as it may, investor appetite has resurfaced for the emerging EV market and the important metals involved in manufacturing the rechargeable batteries that make the cars go.
At this point, most active investors are aware that the world could be staring at shortfalls in production of critical metals like lithium. That has translated to a surge in value for companies like Standard Lithium Ltd. (TSX-Venture:SLL) (OTCQX:STLHF), a Vancouver-based company partnered with majors as it commercializes technology that can produce lithium from brine in a matter of days, rather than years like conventional production.
Standard’s flagship project is a sprawling 150,000 acres in the Smackover Formation in southern Arkansas, where it is evaluating the commercial viability of using its proprietary rapid lithium extraction technology to get its hands on what is considered to be one of the most extensive and best geographically located lithium deposits globally.
Standard is also developing over 30,000 acres of separate brine leases located in southwestern Arkansas and approximately 45,000 acres of mineral leases located in the Mojave Desert in San Bernardino County, California.
After falling in value alongside many peers in the resource space, Standard’s stock has rebounded, with Toronto-listed shares rising sharply from a 52-week low at $0.80 printed on August 21. The last time shares approached this level was July 2017, which was followed by a run to an all-time high at $2.85 in October.
Could that be in the cards again? Since tapping that level in intraday trading a month ago, shares have more than doubled, reaching $1.70 on September 13. What we’re seeing is the downward trend line from the high last year being broken with the recent share price ascension.
Shares also rose over their 50-day moving average in the process, a move widely interpreted as bullish for future movement.
The movement has also validated the strong support at 80 cents as a bottom. By breaking through what was once a strong resistance at $1.13, that level is now established as a good level of support, should the stock slip lower again.
To the upside, SLL is pushing on its 200-day moving average. A move through that is bullish in nature and should signal the chart is ready to test static resistance at $1.82. From there, the skies start opening up, with the only resistance between there and the old high is resistance around $2.50.
While there are never any assurances in the market, nor guarantees from technical analysis, it does provide some guidance on key levels to watch going forward.
The recent gain also speaks to investor recognition that Standard Lithium is stronger than ever before and with billion-dollar partners like Lanxess AG (ETR:LXS) and TETRA Technologies (NYSE:TTI), the company is well positioned to utilize its technology in the near-term to meet growing demand for lithium.
