Lithium Corp

Will LEXG Lithium Corp Bounce ?


Many of you witnessed the company Lithium Corp. (LEXG.OB) make a monster run in April only to be smashed by short sellers, profit takers, and so called momentum players. We pointed LEXG out as a penny stock to watch on it’s way up but also pointed out that it was primarily a trading vehicle.

lithium corp Lithium CorpWill after a miserable May and two pieces of fairly negative news (One about a filing/stock sale, and another piece from Seeking Alpha regarding paid mailers.) this week, shares of Lithium Corp are down roughly 20% at the time of this entry.

Does this mean the run is completely over or does this present a buying opportunity for a quick day or swing trade? We are not sure. However, there is some chatter on the internet that shares of Lithium Corp could bounce from here. Let me explain how this can happen. First of all, there are groups of penny stock day traders who look for situations like this and they are not looking at fundamentals. Most know that Lithium Corp is not a value play based on earnings, revenues etc. These short term minded traders are hoping for one thing and one thing only. This is known as short covering. It would be naive to say that short selling hasn’t played at least a minor roll in Lithium Corp’s decline. Keep in mind that some of these short sale orders may have been placed on a naked basis and have to be covered in a shorter time frame than in a traditional short sale. Lithium Corp is very risky to play from here, but it should still be added to your penny stock list on a just in case basis and can be used as a learning opportunity for future trades.

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LTUM – Lithium Corp

Is LTUM the Next LEXG ?


Lithium Corp. (LTUM.OB) is an exploration mining company that issued a positive PR yesterday. However, that wasn’t the reason for the shares of  LTUM turning into one of the super hot penny stocks yesterday and tripling in price. Quite often, on our stocks to watch list, I highlight sympathy plays. A sympathy play is a stock that to some degree mirrors the performance of  a stock that is moving, The performance of the sympathy play is almost purely based on how the hot stock does. In this case LTUM and a few others made massive moves on the back of LEXG.

Now, can LTUM continue to rise after yesterday’s sympathy move ? It could and I will give you a good reason if it does. Everyone wants the next LEXG, and LTUM is one of the more well know lithium mining penny stocks. From this level, I am not guessing where the stock goes, but shares should be active on Friday. Swing traders, penny stock scalpers, and naked shorts all should be coming out the woodwork soon, as they do in most hot penny stocks.

Lastly, the sympathy play on LTUM started when the stock was under 40 cents yesterday, ended when it hit $1. Now the shares probably trade on their own merit, and this is why. There is one key factor for LTUM today, and it’s pretty simple. Where will LEXG profit takers go with there funds. If they roll into to LTUM, buying sometimes begets more buying. Then this one could get crazy, these penny stocks mining plays can go the other way too, and are very risky. We are not making a market call here, but certainly add LTUM to your penny stock list and do a little do research.

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