On the heels of the $5 billion investment JV announcement between Volkswagen (VLKAF) and Rivian (RIVN), we always like to examine the raw material side.Lithium plays a critical role in making electric vehicles (EVs).Here’s why:
The International Energy Agency (IEA) warns of potential shortages by 2025.While current production can meet demand, future developments and manufacturing methods may alleviate these shortages.Let’s look at the chart.Doesn’t it stand to reason that if Rivian, VW and even Tesla are anticipating a return to EVs in 2025, that lithium is cheap by comparison?The daily chart shows us that in February LIT had a classic textbook island bottom.That yielded a decent rally of over 20% from the lows.Since then, LIT has fallen until yesterday, when it made a new low of 38.87.Today, LIT gapped up now leaving a potential reversal bottom pattern.Even more interesting, besides how poorly LIT has performed, is that Real Motion shows a very clear bullish divergence.Let’s put it this way:If EVs are a great investment going forward, then the underlying commodity looks like the bargain of the year!More By This Author:One Day Doth Not A Sector Rotation Make Big Brother Biotechnology Sector RevivesCan The Bull Market Keep on Kicking? Or Is It Growing Tired? The Answer May Surprise You!
