Lithium ETF (LIT) is Under Pressure By Market Downtrend

The Global X Lithium & Battery Tech ETF (LIT) invests in the full lithium cycle, from mining and refining the metal, through battery production. The Global X Lithium & Battery Tech ETF (LIT) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Lithium Index.

LIT Weekly Chart from September 2022

Lithium ETF (LIT) ended a bullish cycle in November 2021, and we call it wave (I). Wave I ended at 41.19 and we had a 3 waves correction to end wave II at 17.82. Then in March 2020, we saw a strong bounce toward 74.95 to complete wave III and a pullback as wave IV ending at 55.00. The latest rally made 5 new waves to finish at 97.26 and complete wave V and wave (I).

From this point the downward movement started, and it seems that it should complete a double correction before continuing with a rally. We can clearly see 3 swings down to complete wave w at 61.50. Then the x-connector ended at 82.15 and continue lower. We now need 3 more swings lower towards the blue box in the 46.61 – 24.62 area to finish the double correction.

LIT Weekly Chart from September 2022 Alternative

Another alternative for the Lithium ETF (LIT), it is that after finish the connector x it could build a double correction structure as we can see in the chart. It should reach the same 46.61 - 24.62 area and continue a rally. (If you want to learn more about double correction or Elliott Wave Theory, follow these links: Elliott Wave Education and Elliott Wave Theory).

Something important to keep in mind is that for either of these two ideas to be valid, the market must break 61.50. And another important thing, in case LIT does not reach the blue box, keep an eye of 55.00, which is the low of wave IV. From this value Lithium could continue to rise without problems.

Source:  https://elliottwave-forecast.com/stock-market/lithium-lit-pressure-market-downtrend/