Why is the Lake Resources share price up so much more than other ASX lithium shares today?

The Lake Resources NL (ASX: LKE) share price is screaming 12.5% higher today as ASX lithium shares continue on a roll this week. The Lake Resources share price is currently $1.485.

Lake Resources isn’t the only ASX lithium share riding high today.

Shares in Sayona Mining Ltd (ASX: SYA) are up 9.4% at the time of writing. The Core Lithium Ltd (ASX: CXO) share price is up 4.8%, Allkem Ltd (ASX: AKE) shares are rising 2.6%, while the Pilbara Minerals Ltd (ASX: PLS) share price is climbing 4.4%.

Why is the Lake Resources share price so hot?

Today’s gains for the Lake Resources share price follow a stellar day for the lithium producer yesterday.

As my colleague Sebastian reported, Lake Resources was one of the most highly traded ASX shares of the day, with 38.87 million traded at the time of publication. That’s well above its 90-day average of 26 million. Its share price also ended the day 6.4% higher.

As fellow Fool Zach also reported yesterday, the price of lithium is a factor in the Lake Resources share price being up 85% over the past month as of Wednesday. Prices for the battery metal still command a premium and are up more than 406% year over year.

But there’s also been a surge in demand for lithium recently after Shanghai in China came out of weeks of COVID-19 lockdown. The reopening saw a 63% increase in electric vehicle (EV) sales during June.

Lake Resources also got the biggest boost among ASX lithium shares on Tuesday when the United States Senate passed a US$437 billion spending bill including US$347 billion in climate and energy spending. The bill also removed per-manufacturer limits for the US$7,500 tax credit for new EVs.

As Electrek reported, the EV credit will be renewed from January 2023 and run for 10 years.

But of course, these developments benefit every ASX lithium share. So what is the unique element pushing the Lake Resources share price above its peers?

Short-selling positions closing

There have been no price-sensitive announcements out of Lake Resources since its quarterly report on 29 July.

But the Lake Resources share price was sold off during June and July on the back of a short-seller attack.

As my Fool friend Aaron reports, it seems investors are now closing their positions after Lake Resources became one of the most heavily shorted ASX shares.

Short-selling is a trading strategy where investors try to profit from a fall in the share price. The investor borrows then sells the shares, and buys them back later at a lower price for a profit.

The post Why is the Lake Resources share price up so much more than other ASX lithium shares today? appeared first on The Motley Fool Australia.

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More reading

• Why has the Sayona Mining share price rocketed almost 100% in a month?
• What this new Chinese record could mean for Core Lithium shares
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Up 85% in a month, Lake Resources share price extends gains on Wednesday

Motley Fool contributor Bronwyn Allen has positions in Allkem Limited. 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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