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FMST is Flashing a Powerful Trading Signal That Everyone Needs to Pay Attention to Right Away |
Good Morning! |
The markets continue to be HOT right now, and I want to keep taking shots on stocks with great setups that could make a fast move. |
I also want to focus on small-cap plays since that is where I keep seeing the biggest percentage moves. |
A perfect opportunity to look at this morning is Foremost Lithium Resource & Technology (NASDAQ: FMST). |
I am looking at short-term moves, and when you see this chart, I think you'll see why I like it at this precise moment… |
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If you notice that a few weeks ago, the AI-powered technical indicators started to flash "GO," and seemingly out of NOWHERE, FMST rallied over 60% a few days after that. |
👉The "GO" indicator looks at more indicators, oscillators and volatility measurements than a human can easily process. |
When it looks like a stock moves out of "nowhere," that really isn't the case. The AI tools are looking at an enormous amount of data "under the hood" that could drive the stock higher. |
And, from looking at 1000's of examples, I think the AI is usually right. |
After that wonderful 60% move recently, FMST took a pause, which is completely normal. |
The question traders should ask is, "When is the next move likely to resume?" |
While no one ever knows this with certainty, from my years of experience, I have learned to rely on what I call a "Gamma Trigger" move, which is what we just saw happen with FMST yesterday. |
In simple terms, that is when a strong trend takes a pause under the 20-hour moving average (the yellow line on the chart above), and then begins to resume the trend by making at least 4 hours back above that line along with a "GO" signal from the AI. |
I would say that waiting for that unique market signal is like waiting to play a poker hand only when you have pocket aces. ♠️ |
If you don't play poker, trust me when I say that "pocket aces" is the best hand you can get, and you always want to push your chips in at that time. |
Now, does it always win? No. |
In fact, "aces" actually can lose around 20% of the time. Just like poker, trading is a game of odds. You need to have a plan in case things don't turn out as planned. |
Even though I know I will lose 20% of the time with aces, I want to play that hand every single time because I know the odds of winning are tremendous. |
I say all of that to say that from this spot, I don't know with 100% certainty that FMST is headed higher… but I sure like my odds! |
This is the type of setup I think every trader should look for. |
Study it closely on this example with FMST, and then look for it on other stocks. I think you will see that it is a super-high probability setup. |
Beyond this one powerful trading signal, I think there is a big catalyst driving this stock, which is a recovery in lithium and natural resource stocks in general. |
If you look at nat resource stocks over the last few months, you'll see that they have been decimated. Many are down 80% in just a few months. |
While that is terrible if you started to invest in that sector in the Fall of last year, it is great if you are just looking at this sector now. |
As you will also see, many of these resource stocks are beginning to make a big recovery. |
Go look at some of the bigger names like mining equipment producer CAT, lithium company ALB, and steel producer NUE as a few examples. |
These stocks are starting to lead the sector higher, and that is why you are starting to see renewed interest in smaller stocks like FMST. |
The best part is that it is so early in the recovery. I think there is tremendous potential ahead for these stocks. |
And that brings me to, "What does FMST do?" |
Well, foremost Lithium Resource & Technology (FMST) is a Canada-based lithium exploration company that's aiming to be a key supplier for North American battery and EV manufacturers. |
The company has over 43,000 acres in the mine-friendly jurisdiction of Snow Lake, Manitoba: |
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This location is an asset because it's at the tip of the NAFTA "superhighway" with easy access to the key North American manufacturing sites. |
As you probably know, the Inflation Reduction Act passed in 2022 provides an EV tax credit to the tune of $7,500 — but only if the battery materials are extracted or processed in the U.S. or free-trade partner countries such as Canada. |
This is a huge advantage for FMST, but just as important is the type of lithium deposits located on the company's properties. |
I didn't know this, but it turns out lithium is typically found either in brines under dry lake beds or in hard-rock "spodumene pegmatite" sources. |
Brine-derived lithium is more difficult and expensive to process, and can only initially be processed into lithium carbonate, which is useful only in lower energy density EV batteries. |
On the other hand, spodumene-derived lithium can be turned directly into either lithium carbonate or lithium hydroxide, which is the better choice for more energy-dense (read: lightweight) batteries. |
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FMST has confirmed over 40 confirmed pegmatite dykes on its properties so far, and has drill programs projected on each of the properties. |
In great news for the company, it just announced two weeks ago that it had begun drilling on its Zoro Lithium Property thanks to a multi-year work permit from the Manitoba government and a $300,000 grant from the Manitoba Mineral Development Fund which will partially fund the effort. |
Given the proximity of all of FMST's properties to existing infrastructure including highway and railway, and the speed and ease of processing spodumene-derived lithium, this could mean substantial upside for the company in the near future. |
The company also owns a 2,800 gold/silver property in New Mexico that it says has "promising geography." |
It's currently exploring a possible spinoff of that asset which it says "could result in dividend shares to Foremost Lithium Shareholders." |
Bottom line: FMST is in a sector that I think has tremendous potential ahead of it in the next few months, and this stock in particular, is showing me all the signs I am looking for when it comes to a "near perfect" short-term trading setup. |
I really encourage you to put FMST on your screen right now and do all of the due diligence you can on it. |
I think this could be a huge opportunity right now, and I don't want you to miss out. |
As always, make sure you have a trading plan in place that makes sense for you. Read all of the disclosures, never risk more than you can afford to lose, and always have proper stop losses and profit targets in place that you can comfortably live with. |
To Your Success, |
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👊 Make sure you are getting my mobile text alerts – text "RAGE" to 1-(888) 404-5747 to get all of my latest HOT STOCK ideas delivered right to your phone (make sure you put the "1" at the front!). Don't miss out! |
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