ChartWatch: Your favourite ASX lithium stocks, MinRes, Lake Resources, Patriot Battery Metals, and more

This ChartWatch is Part 3 of a technical analysis review of the ASX lithium sector. You may also want to check out Part 1: Did we just see the low in lithium prices? and Part 2: Top 10 ASX lithium stocks picked by you.

Ok, we’re back for our final instalment of ChartWatch ASX Lithium Stocks. If you’re new to this thread, it’s really important you check out my technical analysis primer in Part 2, as it assumes knowledge for the charts and commentary here. Today, the Next 10 most popular lithium stocks as voted by you. Let’s get stuck in!

11. Vulcan Energy Resources (ASX: VUL)

For those who aren’t familiar with this company, Vulcan Energy Resources’ core asset is the Zero Carbon Lithium Project in Germany.

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since September 2021

POD/POS: POD 1 Nov low @ $2.05 vs POS 16 Nov high @ $2.87

Commentary: This is another ASX lithium stock which falls into the category of “failed to bounce” last week. Consider this, if Vulcan Energy Resources can’t rally when there’s a bit of good news around for the sector, what does it mean if we revert to not-so-good news? This chart is a picture of excess supply with well entrenched short-and-long term downtrends, poor price action, and predominantly supply-side candles. A close below the POD at $2.05 could pave the way for further declines, while only a close above $2.87 could make me feel the ST downtrend is over, and above the LT trend ribbon at $4.00 the LT downtrend is over.

12. Anson Resources (ASX: ASN)

For those who aren’t familiar with this company, Anson Resources’ core asset is the Paradox Lithium Project in Utah in the USA.

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since September 2022

POD/POS: POD 29 Aug low @ $0.130 vs POS 3 Nov high @ $0.200

Commentary: I’m going to have to go “ditto” on Anson compared to VUL – another no bouncer! Perhaps the technicals are slightly better here, though, given the short-and-long term trends are less severe. Both are still pointing down, and confirming a state of excess supply, the price action is lower peaks and lower troughs, and the candles are predominantly supply-side. A close below the POD at $0.130 will likely extend the LT downtrend, while a close above the LT trend ribbon at $0.165, but preferably above the POS at $0.20, would likely end it. 

As you go along, hopefully you’re casting your eye back to when my trend ribbons, which operate on a traffic light system, started to warn investors things weren’t completely hunky dory for a particular lithium stock. Green equals look for buy signals, orange equals caution or pass, and pink equals look for selling or short selling signals.

13. Lake Resources (ASX: LKE)

For those who aren’t familiar with this company, Lake Resources’ core asset is the Kachi Project in Argentina.

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since September 2022

POD/POS: POD 6 Dec low @ $0.115 vs POS 9 Nov high @ $0.190

Commentary: Ok, where do I start. Or do I really need to start? This is probably the worst chart in the entire lithium sector. It is the definition of what high-conviction excess supply looks like. The demand side has not wanted a bar of this one, and the supply side appears desperate to get out. I propose this may only occur due to careful consideration of Lake Resources’ fundamentals. Fundamentals create demand and supply. Demand and supply creates price. Price creates trends. The oldest saying in technical analysis is: The trend is your friend. (That is, if you let it be, because not everyone listens to the trend! 😁). I foresee very little in the way of a sustainable LT uptrend until at least a close above the POS at $0.19, but preferably above the LT downtrend ribbon at $0.370.

14. Woomera Mining (ASX: WML)

For those who aren’t familiar with this company, Woomera Mining’s core asset is the Ravensthorpe Li Project in Western Australia.

ST/LT Trends:⬆️ / ⬆️

Price action:⬆️ Peaks / ⬆️ Troughs 📈

Candles: Mostly demand-side since 1 November

POD/POS: POD 20 Nov low @ $0.029 vs POS 11 Dec high @ $0.034

Commentary: Wow! We possibly couldn’t get two more different charts than LKE and Woomera Mining in terms of who’s winning the battle between demand and supply! I note short-and-long term uptrends, good price action in the form of higher peaks and higher troughs, and predominantly demand side candles – all typical of excess demand. There’s some supply evident in the candle which formed the POS at $0.034, and today’s candle’s follow through suggests a possible it’s likely more than just a little profit taking. It’s still a live candle at the time of writing, and hopefully demand from the POD at $0.029 can kick in and push it back up to a better close. The ST uptrend is intact while the price continues to close above the ST trend ribbon at $0.024. 

15. Mineral Resources (ASX: MIN)

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since April

POD/POS: POD1 6 Dec low @ $56.51, POD2 13 Oct low @ $56.20 vs POS1 11 Dec high @ $63.47, POS2 21 Nov high @ $66.39

Commentary: A solid bounce from the 6 December low is consistent with several other of the majors – as is the stall since then. The big white candle on 6 December is impressive, but I propose it lacked conviction when one considers the mediocre volume showing on the day. I suggest that bounce was particularly timely, because a close below POD2 at $56.20 would likely have paved the way for another major leg down, and I feel this scenario remains the major risk for Mineral Resources from a technical standpoint. Trends, price action, and candles still suggest an environment of excess supply. A close above POS1 at $63.47 would flip the price action back to higher peaks and higher troughs – a major positive – but I suggest it won’t be until a close above POS2 at $66.39 before we can say with any confidence the LT downtrend has changed.

16. Ioneer (ASX: INR)

For those who aren’t familiar with this company, Ioneer’s core asset is the Rhyolite Ridge Lithium-Boron Project located in Nevada in the USA.

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since October 2022

POD/POS: POD N/A vs POS 6 Nov high @ $0.190

Commentary: Another “ditto” here for Ioneer versus the very worst candidates in our ASX lithium sector charts so far. It has few redeeming technical features, it is a picture of excess supply, and it doesn’t even have a POD! Let’s deal in miracles here: A close above the POS at $0.0190 would likely signal a change of the ST downtrend, and a close above the LT downtrend ribbon around $0.28 is required to signal a change in the LT downtrend.

17. Galan Lithium (ASX: GLN)

For those who aren’t familiar with this company, Galan Lithium’s core asset is the Hombre Muerto Project in Argentina.

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since November 2022

POD/POS: POD N/A vs POS 6 Nov high @ $0.190

Commentary: Honestly, I am going through this list chart by chart, so when I say a particular ASX lithium company’s chart is the worst I’ve seen, I really don’t know what’s coming up next. Ok then, Galan Lithium now has the dubious honour of the worst ASX lithium chart I’ve seen! Please remember! I make no claims of knowing the fundamental stories of any stocks in this list – you picked them – I am just doing the technical analysis like you asked. So, if I say something is “good” or “not-so-good”, it is solely based upon my understanding of how demand and supply manifest themselves in a chart. Galan Lithium’s chart is a picture of excess supply – it has zero redeeming features in this regard – but if you asked for it to be in this list, you probably knew that already.

18. Arizona Lithium (ASX: AZL)

For those who aren’t familiar with this company, Arizona Lithium’s core assets are the Prairie and Big Sandy Projects in the USA.

ST/LT Trends:⬆️ / ➡️

Price action:⬆️ Peaks / ⬇️ Troughs

Candles: Mostly demand-side since November

POD/POS: POD 6 Dec low @ $0.035 vs POS 20 Nov high @ $0.057

Commentary: We appear to be breaking the mould a little here. ST uptrend against a LT trend which appears to be swinging back to the upside. The price action could be better, as in a lot better – the pullback from the POS at $0.057 has extended further than I would ordinarily like, and on pretty convincing supply-side candles. Still, the POD at $0.035 was punctuated by an impressive demand-side candle, albeit without much oomph in the volume department. This could be explained by limited supply remaining in the system after the pullback, but I’d still exercise some caution and require at least another big demand side showing before I feel comfortable the ST uptrend has reasserted itself, and the LT trend has switched to up.

19. Patriot Battery Metals (ASX: PMT)

For those who aren’t familiar with this company, Patriot Battery Metals’ core asset Corvette Property Project in Quebec, Canada.

ST/LT Trends:⬇️ / ⬇️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since September 2022

POD/POS: POD 6 Oct low @ $1.000 vs POS 3 Nov high @ $0.200

Commentary: Not the worst I’ve seen in the 19 we’ve done so far, but the Patriot Battery Metals chart is far from a picture of excess demand. It’s the opposite, actually, considering short-and-long term downtrends, mixed price action, and predominantly supply-side candles since July. The only redeeming feature is a few clusters of demand-side candles around the key $1.00 POD. It looks like some speculative buying, possibly betting the round number is the low. The major issue for me is if these buyers get their fill, and supply continues in line with trends, then we could see another leg down to test the January low of $0.660. I’d need a close above the POS at $1.16 to tell me the ST downtrend is over, and a close above the LT downtrend ribbon at $1.33 to tell me the LT downtrend is over.

20. Raiden Resources (ASX: RDN)

For those who aren’t familiar with this company, Raiden Resources’ core asset is the Mt. Scholl Project in Western Australia.

ST/LT Trends:⬇️ / ⬆️

Price action:⬇️ Peaks / ⬇️ Troughs 📉

Candles: Mostly supply-side since 15 November

POD/POS: POD 6 Dec low @ $0.033 vs POS 11 Dec high @ $0.044

Commentary: Raiden is another in a very short list of ASX lithium charts which still demonstrate a LT uptrend – no mean feat. But I can’t get past the high conviction from the supply side / lack of conviction from the demand side since the blow-off top at $0.080 on 15 November. When the bounce did come (the fleeting 6 December bounce!), it was feeble, only pushing as high as $0.044 before two more supply-side candles appeared. A close below the POS at $0.033 will confirm the death of the ST uptrend. On the other hand, it would take some mighty demand side candles and a close back above $0.044 to convince me excess demand has returned, and the ST uptrend has reestablished.

Missed an article in this series? You may also want to check out Part 1: Did we just see the low in lithium prices? and Part 2: Top 10 ASX lithium stocks picked by you.