Although the market as a whole has tumbled lower today, one group of shares has fallen more than most.
In afternoon trade almost all of Australia's lithium miners have sunk deep into the red following a broad sell-off of the industry.
Here's the state of play at the time of writing:
- The Galaxy Resources Limited (ASX: GXY) share price is down 6% to $3.46.
- The Kidman Resources Ltd (ASX: KDR) share price has fallen 4% to $1.25.
- The Lithium Australia NL (ASX: LIT) share price is down 1.5% to 17.7 cents.
- The Mineral Resources Limited (ASX: MIN) share price is off 2% to $18.40.
- The Orocobre Limited (ASX: ORE) share price is down 1.5% to $4.48.
- The Pilbara Minerals Ltd (ASX: PLS) share price has tumbled 4% to 77 cents.
Why have they sunk lower?
With no notable news out of the industry or falls in the lithium price, I feel today's declines are likely to be a case of profit taking following strong rallies over the last few weeks.
After all, prior to today, Galaxy, Kidman, and Pilbara Minerals shareholders had seen their respective shares rise by at least 90% over the last three months.
Whilst I am very bullish on their long-term prospects, even as a Galaxy shareholder I felt uneasy by this strong gain in such a short space of time. Hence why I stopped recommending Galaxy as a buy.
And while Galaxy is looking a lot more attractive at this level, I would suggest investors hold off an investment until the dust settles.
