Albemarle (ALB)

Mar 10, 2021Trade Ideas

Some of the pullbacks in the market are overdone.

Look at Albemarle (ALB), for example. It’s involved with lithium, where prices are rocketing on supply-demand issues. According to The Wall Street Journal for example,” The supply-and-demand balance for lithium fell into deficit in 2020 for the first time in years, according to commodity analysts at CRU. For 2021, the firm is forecasting lithium demand of about 450,000 metric tons, exceeding supply by roughly 10,000 metric tons.”

Yet, ALB recently slipped from a high of $188.35 to $154, where it’s obscenely oversold. In fact, if you pull up to two-year chart of ALB, you can clearly see it’s over-extended on RSI, MACD, and Williams’ %R. From a current price of $153.71, we’d like to see a test of its prior highs.

Investors can buy the ALB stock at market, and/or buy to open the ALB April 16, 2021 160 calls at market prices. These are a bit out of the money at the moment, but that may not be the case for much longer.

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