Why has the Lake Resources share price been so volatile lately?

man sits on the dock enjoying the quite of the lake in the mountainsman sits on the dock enjoying the quite of the lake in the mountains

The Lake Resources N.L. (ASX: LKE) share price has been on a volatile journey in 2022, with shareholders holding on tight across the year.

Prices have traded in a wide range reaching as high as $2.45 on 4 April, before trading as low as 60.5 cents on 14 July.

At the time of writing, the Lake Resources share price is fetching $1.04 apiece, less than 2% down on the day.

What’s up with Lake Resources?

It’s been a busy past few months for the company. Whilst the price of lithium carbonate has surged back above its all-time highs, shares in the lithium miner haven’t been so fortunate.

In particular, broad selling pressure across the wider market has been a factor this year for Lake, as investors seek to position against names turning a profit or with high cash flows.

With various systemic risks now at play, “selling has been strongest in higher risk assets such as lithium shares,” The Motley Fool wrote last week.

The lithium share had also attracted a high amount of short interest from short sellers over the past week, with one particular short-biased research firm raising questions on the company’s direct lithium extraction (DLE) technology.

Nevertheless, Lake shares still managed to catch a bid in recent times after further updates at its Kachi Lithium project, located in Argentina.

After an initial step-back involving a dispute over milestone payments at the site, Lake reassured investors last week by noting that it expects to complete onsite processing of Kachi brines in October, should all go according to plan.

This, whilst the price of lithium carbonate ratcheted up past its all-time highs, as the asymmetry in demand and supply for battery materials continues to widen.

Despite the wave of constructive updates out of Lake’s camp of late, it hasn’t been enough for the share to recover back above its previous highs.

Nevertheless, if the price of lithium carbonate is anything to go by, this forms a solid bedrock for the company to prevent an all-out collapse.

After a strong year, it now trades just 3% in the green this year to date and has held an 80% gain for the past 12 months.

The post Why has the Lake Resources share price been so volatile lately? 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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