Miner Lithium Americas (LAC.TO) has rocketed up the rankings in the SIA S&P/TSX Composite Index Report in the last few days climbing up out of the red zone and entering the Green Favored Zone for the first time since joining the index back in March. Yesterday, LAC.TO finished in 53rd place, up 17 spots on the day and up 126 spots in the last week.
Lithium Americas (LAC.TO) had been under distribution and steadily drifting downward on dwindling volumes since a rally topped out back in January above $30.00. Earlier this month, the shares downward trend was contained by a long-term underlying support line. In the last week, the shares have come under renewed accumulation, moving back above their 50-day moving average on increased volume indicating renewed interest from investors.
Initial upside resistance appears near the $20.00 round number, followed by the $22.00 to $22.50 area based on previous highs and lows, then the $25.00 round number on trend. Initial support appears at the 50-day average near $17.55.
A downtrend of lower lows and bearish breakdowns in Lithium Americas (LAC.TO) which started back in January, appears to have to bottomed out with the shares completing a Double Top breakout, their first positive pattern signal since a Triple Top breakout back in December. So far this looks like a trading bounce, but a move back up through $19.15 would complete a bullish Spread Double Top and confirm the start of a new uptrend.
Should that occur, next potential upside support may appear near $21.15 where a horizontal count and a previous column high converge, then a previous high near $22.00 and a previous low near $24.75. Initial support appears near $17.00 based on a common 3-box reversal.
With a bullish SMAX score of 7, LAC.TO is exhibiting near-term strength against the asset classes.
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