Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 26 Nov, 24 | SLI | Speculative Buy | CAD 2.53 | CAD 2.89 | CAD 3.06 | 17 days | 20.9% |
Data Powered by EOD Historical Data (“EODHD”).
Standard Lithium Ltd. explores for, develops, and processes lithium brine properties in the United States. Its flagship project is the South West Arkansas Project and the Phase 1A Project located in southern Arkansas. The company was formerly known as Patriot Petroleum Corp. and changed its name to Standard Lithium Ltd. in December 2016. The company was incorporated in 1998 and is headquartered in Vancouver, Canada.
DOE Grant for SWA Project: Received a conditional $225 million grant from the U.S. Department of Energy, marking one of the largest grants awarded to a U.S. critical minerals project, to support the construction of a key processing facility.
Strategic Partnership with Equinor: Secured up to $160 million from Equinor ASA, which acquired a 45% stake in the SWA and East Texas projects, significantly strengthening the Company's financial position without diluting existing shareholders
Limited Cash and Working Capital: Cash reserves of C$52.9 million and working capital of C$39.6 million as of June 30, 2024, could constrain the Company's ability to scale operations without additional financing.
Modest ATM Equity Program Proceeds: Generated only C$2.8 million and US$13.3 million through share issuances under the at-the-market equity program, which may limit access to further immediate capital.
Key investment risks for the company include dependency on successful DOE grant negotiations and government support, the high capital intensity and scalability challenges of lithium projects, reliance on partnerships like Equinor for project advancement, and limited cash reserves which may necessitate further equity dilution or financing.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 2.53 | 2.05 | 2.89 | 3.06 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Price Action Analysis (on the Daily Chart)
On the daily chart, SLI stock prices are trading above the downward sloping trendline support level and continuously taking support from the trendline. The recent upside movement in the stock is backed by increasing volumes, further supporting a positive bias. The next resistance level is placed around CAD 2.89, and the stock may test that level in the short term (2-4 weeks).
Technical Indicators Analysis (On the Daily Chart)
On the daily chart, the momentum oscillator RSI (14-Period) is showing a reading of ~47.17 levels, indicating positive momentum. Moreover, the weekly volumes also seem supportive of the upside movement. However, the stock is trading below the 21-period SMA, which may act as a resistance level.
As per the above-mentioned price action and technical analysis, Standard Lithium Ltd. looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decisions should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Other Industrial Metals & Mining
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to EBITDA (x) | |
|---|---|---|---|---|---|---|---|---|
| SLI Standard Lithium Ltd |
0.03 1.51% | 2.02 | 3.62 | - | - | 1.61 | 2.70 | |
| SGML Sigma Lithium Resources Corp |
0.35 2.23% | 16.04 | 117.60 | 12.59 | 6.64 | 11.00 | 7.33 | 37.02 |
| AFM Alphamin Res |
- -% | 1.09 | 15.50 | 9.43 | 3.68 | 3.24 | 2.67 | 5.64 |
| ALDE Aldebaran Resources Inc |
0.37 21.14% | 2.12 | - | - | - | 2.67 | -16.8764 | |
| SFR Sandfire Resources America Inc |
- -% | 0.30 | - | - | - | 56.34 | -39.947 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is NOvember 25, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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