Aussie Spodumene Miners Potential Bottom - GXY
Updated
Pricing Strengths Pre & Post COVID Despite Weak Fundamentals Outlook
Potential market bottoms forming for PLS & GXY.
Buy recommendation for low-cost brine and scalable spodumene producers.
Catalysts
Considerations
Potential market bottoms forming for PLS & GXY.
Buy recommendation for low-cost brine and scalable spodumene producers.
Catalysts
- relative performance of brine players such as ORE pre COVID vs. relative strength in spodumene producers after COVID selloff
- Higher than expected adoption for EVs from government
- GXY's Expansion plans
- Potential candidate for hedge against future inflation
Considerations
- Large increase in spodumene prices in the near term likely to be curtailed by existing players scaling proaction as soon as prices allow
- Current consensus of glut being resolved in lithium market is late 2021-2022
- Strategic partners & funding
- Short Squeeze/Fundamentals failing to keep up with pricing
Entry: Average price of $1.10 on 03/08/2020
Stop Loss: $0.685
Note
Increasing volatility ahead. Just on a side note: ALB & SQM are approaching key resistance levels.
Trade active
Update: Increase stop loss level to $1.0Capital at risk: 10%
Note
Note: This is not technical or fundamental analysis. It is purely a hypothetical scenario. With regards to Strategic partners & funding, there is a company called CATL that completed a 2.85 billion USD capital raising earlier this year with plans to vertically integrate into next generation battery/FC production chain.
This means that GXY's and CATL interest may potentially align. CATL may appear as an interested party for GXY's future capital raising.
If I am a sophisticated entity with insider information if things are heading into this direction(which I have no clue), then I would be hoarding shares right now.
Trade closed manually
Trade closed manually @ 1.165 to lock profit due to today's gap.
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