Many nations are taking environmental sustainability commitments seriously. Although European countries lead the charge for this cause, the United States is not far behind. By 2035, the U.S. looks to ban the sale of gas-powered cars. The United Kingdom plans to do it five years earlier.
Source: Vlad Tchompalov
It will be a significant change if these happen, as the transport sector alone accounts for 21% of total emissions.
Like many major changes in history, some stocks suffered while others soared for the same reason. The stock we have for you today is one we believe will be at the forefront of the gainers. We bring you Lithium Americas Corp. (NYSE: LAC)
And so, the transition from gas-powered cars to battery-powered cars has been set in motion. These batteries are raw-material-intensive, with lithium being one of the most prominent of these raw materials. As a result, the demand for lithium will only grow as more EVs and EV makers come on board.
Let’s talk a little more about Lithium Americas. Sometime in the middle of the year, Lithium Americas plans to begin production at Cauchari-Olaroz in Argentina. In its FY 2021 full-year report, the company estimated the project to be at 85% completion.
But what’s perhaps more exciting is the company’s gaining of permit to start construction at Thacker Pass lithium mine in Nevada.
Apart from the apparent fact that productions are only around the corner, diversity is another benefit of having these two mines in Argentina and the U.S. This way, the company can better serve various EV operations.
The demand for lithium will be the driving factor for the LAC stock. The market opportunity is also immense. But there undeniable are risks.
Lithium Americas is still pre-revenue and still without profits. So, until Lithium America begins production, gets its products to the market and makes its first sales, shareholders are still keeping their fingers crossed.
However, a lot of investment has gone into this company and the expectations from shareholders are at peak levels. If all things remain equal, Lithium Americas is a great investment opportunity for investors who wish they had bought Amazon stock in 1998.
Technical Analysis
LAC stock has been on an uptrend since March 2020. A strong trendline underlines the stock price as it hit its all-time high in late 2020.
As we speak, the stock has settled above the $23.7 – $25.6 support level. And if you zoom into the daily chart, you’ll find that this support level has been tested five times, proving its resilience.
There’s still some room to grow for LAC stock before it reaches the $39.3 – $41.6 resistance level above it. But should the stock bow to the bears, the support trendline that holds the stock may fail, exposing it to a free fall to the $6.2 – $8.2 support level.
Long term, however, we have strong bullish sentiments for LAC stock, more because of its fundamentals than its technicals.
