Lithium Americas (LAC)

Feb 2, 2021Trade Ideas

With the EV boom accelerating, pay close attention to lithium stocks, like Lithium Americas (LAC). For one, the world may soon run into another severe lithium supply crunch. In fact, by 2024, demand for lithium is expected to more than double, as the production of electric vehicle batteries gears up for big growth, as reported by Creamer Media’s Mining Weekly.

Two, the lithium market could also benefit from a Joe Biden victory, noted Albemarle Corp. CEO Kent Masters, as quoted by Bloomberg. “There’s the incentives, and the emphasis that’s put on electrification and EVs around that. The market side of it would be more favorable with Biden.”

Three, with governments around the world pushing for a greener, EV future, lithium will be under heavy demand. California Gov. Gavin Newsom, for example just signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. In addition, analysts at Citi say the “global glut of the energy-storing metal will dissipate by the middle of next year as demand for electric vehicles (EVs) accelerates,” as noted by Forbes.

Lithium Americas is one of the top ways to trade the story.

The stock, which recently found support at $19.41 looks ready to push higher. In fact, we’d like to see it close to its prior high of $28.75. You can buy the LAC stock and/or buy to open the LAC March 19, 2021 20 calls at market. You can hedge with the LAC March 19, 2021 20 put.


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