Lithium $ALB & $SQM Observations

Today's post is short.

I mentioned yesterday that I was interested in $ALB but didn't mention $SQM. I researched $SQM after I finished the blog yesterday. I said I was going to monitor $ALB today to understand if the stock would close above the defined channel, if it did, then the "set" resistance would become the new support for it.

Let's take a look at today's performance:

In the chart above, it is evident that the $ALB was way above the resistance from the beginning of the day. In addition to that, we can see high trading volumes that were mostly controlled by the buyers. This immediately tells me that the investors are confident on the price and the future of it, which now steers me into investing.

Let's take a look at $SQM, while I'll not do the breakdown in here for the 3 months, 1 month, and 5 days. Know that I've looked at it on my own and I will be attaching the chart with the defined channel and today's closing. See below:

Similarly to $ALB, when zooming out to 3 months and 1 month, the price increase is exponential. In the last 5 days as shown above, the channel breakout is evident, and we see that there is a new channel forming. While the trading volume is shared almost equally by both buyers and sellers day in and day out, it is easy to see that there still heavy conviction in the price. I can expect on Monday for the price to remain around $84 during the day but maybe close around $87. We'll see.

So, I've stuck to my rules and didn't preemptively invest in the stock without observing its performance.

Here's what we're looking at for one contract of call options for each:

$ALB for $195 on February 23

• Break-even: $205.28 (Amount paid + premium)
• Strike Price: $195
• Contract: $10.80 per share (Remember you have to buy 100 so the total is $1,080)

$SQM for $90 on February 20

• Closed at $86 on January 23
• Break-Even: $92.60
• Strike Price: $90
• Contract: $3.20 per share ($320 total)

I'll go ahead and open $SQM as a contract and get a shares in Charles Schwab for both SQM and $ALB

While I feel confident that $ALB will continue to go up, I have to acknowledge that I am still learning and my initial goals from now to February includes having at least 2 successful trades. I want to be cognizant of the risks and the rewards. I didn't set a specific target profit for this initial round as this is pretty much applying real learnings into the stock market and want to approach it with both curiosity and caution. It's the weekend now, so we will begin monitoring the performance of the two while continuing to learn more setups and volume percentages.