Lithium Americas (LAC.TO) $1.00 resistance becomes $1.00 support....

LAC.TO still hasn't seen the "clear sky break out" I've been anticipating from the Cup & Handle chart pattern I've remarked on in earlier posts.  Perhaps it never will, I still like the chances but there's no such thing as a slam dunk, not in the public markets.

But something positive has happened.  

After butting up repeatedly against resistance at $1.00 CDN the stock finally broke through on June 30th 2016 and from that day until now it has not closed below one Canadian dollar.  From July 4th (Canadian markets are open on the 4th, closed on July 1) to present the lowest LAC has traded is 97 cents during the trading day.  But even on the two days shares dipped to that 97 cent level, bulls pushed it back up to at least $1 at the bell.

Does that mean LAC won't fall back below $1 CDN?  No, again...there are no sure things in the markets.  But it is a bullish technical indication going forward when a level of resistance becomes of level of support, which is what the chart shows.

Also take note of the volumes.  The green bars represent volumes when the PPS closed up for the day, and the red bars correlate to days when the PPS closed down.  Another bullish indication is when prices climb on heavier comparative volume and fall when trading is lighter.  LAC closed down .01 cents on the TSX Wednesday (July 13th 2016) but volume was only 737,411 on the various Canadian exchanges, and only 530,134 on the main TSX.  

That's about one quarter of the 3 month average volume on just the TSX, which is 2.1 million. Should volumes pick back up into the 5+ million range I expect to see another + spike in the PPS.  And maybe even that clear sky breakout I believe the Cup & Handle chart has been predicting.

How high do I think LAC might go?  That's a tough question, but the first obvious line of resistance in my opinion is that $1.15 price level that shares hit on July 4th.  If LAC can get above that $1.15 CDN mark then I'm looking at the US side where Lithium Americas trades with the symbol LACDF.  

Just as $1 CDN proved a point of resistance, I think $1 USD could likewise translate into another psychological barrier.  The volumes on the Canadian TSX exchange are more robust, but volumes south of the border are nothing to sneeze at either.  Average daily volume for the past 3 months for LACDF is just a hair shy of 700,000 per day.  

$1 USD is around $1.30 Canadian at current exchange rates.  And full disclosure, I have an order to sell a portion of my shares in around this level.   Will my sell order fill?  I like the chances, but for a third time now....obviously, there are no sure things.  

If history is any guide, I have a habit of selling too soon in any case, witness Nemaska.  If LAC busts through $1 USD and keeps climbing....oh well, I'll cry into the money I made.  But not too much, I'll still be holding what I consider a significant position having only taken profits on a little over one third of my shares.

As I say so often here at Avoid The Bag, repeating the lesson my late great father taught me, nobody ever went broke taking profits.

Good luck and please take note of the disclaimer at the very bottom of this blog.  Also comments are always welcomed provided the tone is reasonable and absent of the usual pumping and bashing seen on most message boards.