Why is the Lake Resources share price rallying 11%?

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computerA woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer

The Lake Resources NL (ASX: LKE) share price is pushing higher today.

At the time of writing, the lithium share is trading 11% higher at 69.5 cents apiece, bouncing from its 52-week low of 60.5 cents on 14 July.

In broader market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is rangebound, currently 0.23% lower in early afternoon trading.

Why’s the Lake Resources share price lifting?

Investors have pushed the share higher on no news today. Noteworthy though is the price of lithium carbonate.

It has remained buoyant these past few months at $103,154 per tonne, while other commodity sectors have come down from earlier peaks.

For example, before its recovery today, Brent Crude – the world’s oil benchmark – had been flailing over the past month coming down off multi-year highs in March.

Hence, as a basket, lithium shares have strengthened lately. Nevertheless, they are yet to recover from a large drawdown incurred earlier in the year.

Lake fell from a 52-week high of $2.45 on 5 April. After plateauing around May, the rug was pulled beneath it again amid the June selloff, as illustrated below.

TradingView Chart

Moreover, the Lake Resources share price is recovering from the effects of a scathing research report from short seller J Capital.

Lake Resources refuted the claims, saying the report “puts forth incorrect information on technical matters and inaccurate assertions on Lake Resources’ progress to date”.

Although Lake issued a response to the report’s claims, the fallout added to the company’s losses in 2022 so far.

The share also was one of the most shorted names on the ASX last week.

As reported by TMF on 15 July, “[a]round 9.6% of its stock was in the hands of short sellers at the last count”.

Over the last year, the Lake Resources share price has held a gain of more than 80%.

The post Why is the Lake Resources share price rallying 11%? appeared first on The Motley Fool Australia.

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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 Scott Phillips.

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