Shares in Liontown Resources Ltd (ASX: LTR) have pared gains in recent days and are now down 12% in the past week. That builds to a 20% drop in the past 8 trading days.
Despite no market updates, investors have been unloading Liontown shares. It now trades in line with 3-month averages, Bloomberg data shows.
What’s up with Liontown Resources shares?
While there’s been no remarkable news from the company, noteworthy is that the price of lithium carbonate just took its first major backward step since December 2020.
Yes, that’s 2020. Lithium carbonate has been on an extended vertical rally for almost 18 months now.
Prices struck an all-time high of 497,500 Chinese Yuan in late March, before heading sideways, and then trading 3% lower where it currently rests.
Lithium pricing had been touted as a key catalyst for Liontown’s share price, notwithstanding the growth of company earnings as well.
In a Motley Fool article yesterday, major broker Macquarie weighed in on the lithium market and tipped its preferred ASX shares …”[they] think ASX lithium shares Allkem Ltd (ASX: AKE) and [Liontown] will outperform their peers”.
Since March, prices of lithium and Liontown’s share price have moved almost in unison, as seen on the chart below.
In the absence of any other market catalysts, it appears the pause in the lithium rally may have transcended over into the Liontown share price.
In the past 12 months, Liontown shares have surged more than 342% but dipped 60 basis points into the red this year to date.
The post Why has the Liontown share price tumbled 20% in 8 days? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Liontown Resources right now?
Before you consider Liontown Resources, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Liontown Resources wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Which ASX lithium shares does Macquarie tip to outperform?
- These were the worst performers on the ASX 200 last week
- Why not all ASX lithium shares are winners from surging commodity prices
- 2 hot ASX lithium stocks brokers rate as buys
- Is a bubble forming for ASX green metals shares?
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/bmEGej3
Leave a Reply