Lithium technology and development company Standard Lithium (NYSE:SLI)'s stock has been on a tear this year trading up over 500%. This little-known company is testing a carbon capture technology in addition to a patent-pending lithium extraction process (LiSTR) that can improve both the purity and processing of lithium from brine.
The Company also has a proprietary technology (SiFT) that can produce greater than 99.9% purity battery-quality lithium carbonate. While the technology has been processing lithium chloride and reprocessing rare earth materials into battery quality lithium, it has yet to reach production status as it’s still a proof of concept novel technology.
While most of the world’s battery-grade lithium is outsourced to China, Standard Lithium has the potential to secure a domestic supply chain as a matter of national security. The electric vehicle revolution is well underway and the demand for battery-grade lithium is expected to rise more than five-fold as major auto manufacturers like Ford (NYSE:F) and General Motors (NYSE:GM) have engaged in the electrification of their offerings. Risk tolerant speculators seeking a niche opportunity in a novel technology that can revolutionize lithium mining and processing to meet EV demand tailwinds can watch for opportunistic pullbacks in shares of Standard Lithium.
Lithium Production
In a nutshell, there are two ways to extract lithium. Hard rock mining is expensive and destructive to the environment. Brining involves utilizing solar evaporation and wind to process the brine beneath the crust on the sale lake into shallow evaporation ponds. While brining is much more eco-friendly, it is also time-consuming as it can take up to two years to extract the lithium waiting for the water to evaporate.
Imagine if you could cut the wait time for a year to mere hours. That’s the promise of Standard Lithium’s LiSTR technology that can extract higher quality lithium greener and much quicker and cheaper than traditional methods used today. Standard Lithium has the potential to create a complete end-to-end solution for producing battery-quality lithium carbonate domestically.
Standard Lithium has the technology and is collaborating with a global leader Lanxess AG (DE:LXSG) (OTC:LNXSF) in a potential joint venture to access 150,000 acres of brine lands. The Company also has its own brine lands including 27,000 acres in Arkansas and 45,000 acres in the Mohave Desert.
Once the Company passes its proof of concept stage, Lanxess will finalize a joint venture to move into the production and commercialization stage. This is what investors are speculating on. The potential to revolutionize the lithium mining industry to not only help meet the projected insatiable demand from EVs but also break the near-monopoly on lithium production in China has been driving shares higher.
SLI Opportunistic Pullback Levels
We use the rifle charts on the weekly and daily charts to provide a precision small time frame price analysis for shares of SLI. The weekly rifle chart uptrend has a rising 5-period moving average (MA) support near the $9.08 Fibonacci (fib) level. The daily 15-period MA is rising near the $7.45 fib with weekly upper Bollinger Bands (BBs) at the $11.75 fib. The weekly stochastic mini pup is crossing through the 80-band.
The daily rifle chart peaked at the $11.27 fib and is stalling out on the uptrend with a flattening 5-period MA at $10.56 and rising 15-period MA at $9.18. The daily stochastic peaked and slipped under the 90-band. The daily market structure high (MSH) sell triggers under $9.61. The daily market structure low (MSL) buy triggered a breakout above $7.83.
Prudent and risk-tolerant investors can watch for opportunistic pullback levels at the $9.08 fib, $8.66 fib, $7.91 fib, $7.45 fib, $6.59 fib, and the $5.72 fib. Upside trajectories range from the $13.77 fib up towards the $17.10 fib level.