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- 1 LAC stock price slumped 7.19% on Tuesday to close at $18.86.
- 2 Lithium Americas Corp. (NYSE: LAC) stock price suffered rejection from the 200-day EMA and declined.
- 3 The daily chart shows the formation of a falling wedge pattern.
Lithium Americas Corp. (NYSE: LAC) stock price slumped 7.19% intraday on Tuesday’s session. The price slipped after suffering rejection from the upper trendline of the falling wedge pattern. The LAC stock has lost 12% of its market cap in the last two sessions.
The daily chart witnessed the price to be in a correction phase and trapped in a falling wedge pattern. The stock follows the channel and contracts its range of trading in the falling wedge channel. The price currently trades in a neutral territory with bulls and bears struggling to dominate near the upper and lower trendline.
The technical indicators imply that the 200-day EMA is acting as a dynamic resistance for the price as it has suffered multiple rejections from the EMA to decline. The recent encounter of the price with the 200-EMA resulted in a 12% fall in the last two days.
The analysts offering a 1-year price forecast for Lithium Americas Corp. have a wide range of outlook. The analysts have a maximum bullish outlook of 121.11% which could take the price to a high of $41.70. The analysts have a minimum outlook of 32.5% which could hike the price to $25.
LAC stock option-chain analysis states that the current implied volatility in the market is 41.72% with an increment of 1.01% in the last trading session. The at-the-money strike price has 39 open contracts on the PUT side and 267 open contracts on the CALL side; indicating the dominance of sellers at the current level.
LAC Stock Price Shows a Falling Wedge Pattern
The LAC stock price currently trades at $18.86. The price has suffered rejection from the upper trendline of the falling wedge pattern and declined. The price might continue to decline in Wednesday’s session as the price has shown selling pressure in the past 2 sessions.
The price might decline till the lower boundary of the falling wedge pattern. The buyers may try to take over and raise the price higher. The price trend is indecisive until the price is maintained in the channel. The breakout or breakdown of the LAC price may trigger an imbalance and the price may get directional.
EMAs Show Bearishness in Short-Term
The daily LAC stock price chart shows that the price fell below the key exponential moving averages indicating the dominance of the sellers at the upper levels. The overall technical opinion rating including RSI and MACD signals a 72% “sell” with the average short-term outlook on maintaining the current direction.
Conclusion
Lithium Americas Corp. is a company that produces and sells lithium products. The LAC stock price is in a downtrend and follows a falling wedge pattern. The price faces resistance from the 200-day EMA and declines. The analysts have a high estimate of $41.70 and a low estimate of $25 for the next year. The price is neutral until it breaks out or breaks down from the wedge pattern. The price may continue to fall or bounce back depending on the market sentiment and volume.
Technical Levels
- Support levels: $17.71 and $16.23
- Resistance levels: $21.76 and $24.15
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
