Global X Lithium & Battery Tech is an exchange-traded fund that tracks the Solactive Global Lithium Index.
Lithium is a key base chemical used in the production of batteries to power "clean" future technologies. As demand for electric vehicles, as well as smartphones and other portable technology increases, global lithium production is expected to see a strong increase over the next decade as suppliers try to meet what could be an unprecedented mismatch.
Technically, a falling wedge pattern in a previous uptrend makes the ETF an attractive investment opportunity (see the black converging trendlines on the main chart as well as the insert). This can be interpreted as bullish, even if the pattern is not yet completed. The expectation is that the price may develop further to approach and extend the upper range of the pattern.
This expectation is further supported by a series of green Heikin-Ashi candles, which suggests a consistent presence of buyers in the market, indicating a potential continuation of the bullish trend.
The start of upside price momentum according to the Moving Average Convergence Divergence (MACD) indicator and the recent upwards trajectory of the On-balance volume (OBV) indicator further supports the bullish trend.
We suggest a low capital at-risk allocation and a medium technical analysis for this trade. Increase exposure for a break above $65.00.
Share Information
| Share code | LIT |
|---|---|
| Industry | ETFs |
| Market Capital (USD) | 3.25 billion |
| One year total return | -7.77% |
| Return year-to-date | 7.64% |
| Current price(USD) | 63.09 |
| 52 weeek high(USD) | 82.17 |
| 52 week low(USD) | 57.56 |
| Financial year end | - |
| Closing paragraph | Several technical indicators are pointing to upside potential. Nonetheless, expect price fluctuations going forward. |
Solactive Global Lithium Index Consensus Expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | - | 13.58 | 16.05 | 20.73 |
| Growth (%) | - | - | 18.23 | 29.14 |
| Dividend Per Share (USD) | - | 4.12 | 4.23 | 4.66 |
| Growth (%) | - | - | 2.65 | 10.25 |
| Forward PE (times) | 19.09 | 16.14 | 12.50 | |
| Forward Dividend Yield (%) | 1.59 | 1.63 | 1.80 | |
| Closing paragraph | Growth expectations are robust over the medium term, with demand being bolstered by positive secular trends. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
DIOD - BUY (Continue to hold) |
KO - BUY (Continue to hold) |
HLMN - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 82.60 | 61.85 | 8.01 |
| Current | 90.00 | 63.22 | 8.08 |
| Movement | 9.0% | 2.2% | 0.9% |
| Summary text |
An ascending channel pattern remains attractive. The stock remains above its 200-day simple moving average and fading downside price momentum further reinforces the bullish trend.
Our profit target is $98 with a trailing stop-loss at $83.70. Exit the position on 27 July 2023. |
A symmetrical triangle pattern during a prior uptrend remains noteworthy. The stock remains above its 200-day simple moving average. Fading upside momentum, however, is a concern.
Our profit target is $67 with a trailing stop-loss at $61.30. Exit the position on 16 June 2023. |
Repetitive cycles in sequences remains of interest. The stock is testing its 200-day simple moving average. Sudden downside momentum is a concern to the bullish trend.
Our profit target is $10 with a trailing stop-loss at $7.50. Exit the position on 10 October 2023. |
| Share Name and position |
REMX - BUY (Continue to hold) |
STZ - BUY (Continue to hold) |
COST - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 84.60 | 228.16 | 501.27 |
| Current | 84.20 | 226.69 | 496.15 |
| Movement | -0.5% | -0.6 | -1.0% |
| Summary text |
A completed bullish Elliott wave pattern remains of interest. The stock is below but approaching its 200-day simple moving average. Upside momentum supports the bullish bias.
Our profit target is $99 with a trailing stop-loss at $79. Exit the position on 21 July 2023. |
A bullish megaphone pattern remains of interest. The stock is trading below but approaching its 200-day simple moving average. Upside price momentum supports the bullish bias.
Our profit target is $252 with a trailing stop-loss at $218. Exit the position on 21 June 2023. |
A confluence of technical indicators that align with a bullish trend remain of interest. The share is testing its 200-day simple moving average. However, recently halted upside price momentum is a concern.
Our take profit target remains at $560 with a trailing stop-loss at $480. Exit the position around 7 July 2023. |
