We purchased a stake in SQM using about 1.5% of capital on December 19th, just under $25 a share. We did not catch the bottom, nor did we attempt to. It is a core long.
SQM is based in Chile and is the world's largest producer of lithium. Lithium is used in electronics, especially the proliferating portable devices. It is also an input into lithium batteries, which maybe used in hybrids. The Chevy Volt for example. SQM's lithium is produced by evaporation process of the firm's massive Andean brine lakes.
http://finance.yahoo.com/q?s=SQM
Technically, We note that the stock, based upon a two year chart, has broken out of a down trend.
Additionally, the chart pattern is forming an ascending triangle, based on SQM's October 9th low. This is a favorable chart pattern which portends an upside breakout.
http://finance.yahoo.com/echarts?s=SQM#symbol=SQM;range=2y
Note, we would like to see volume follow the price up, but remind readers that volume is a secondary technical indicator. The price is always paramount.
As always we are not making recommendations for anyone, but outlining our personal investment decisions. We are not registered investments advisors and do not give investment advice.
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