The Pilbara Minerals Ltd (ASX: PLS) share price is coming under selling pressure on Friday.
During market open, the lithium producer's shares kicked off at $4.55, before briefly rising to an intraday high of $4.57.
However, bearish sentiment weighed on the share sending it back down to $4.55, a loss of 2.99%.
Let's take a look at what is causing Pilbara Minerals shares to sink today.
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What's driving Pilbara Minerals shares lower?
After rising to a record high of $4.795 yesterday, the Pilbara Minerals share price is cooling off.
This comes after Wall Street digested the mixed batch of economic data that came out of the US.
The reports showed that retail sales were moderating while the manufacturing sector experienced a slight gain in production.
On the other hand, jobless claims dropped for the fifth week in a row as businesses struggled to fill millions of job positions.
Subsequently, this led the Dow Jones Industrial Average Index (DJX: .DJI) to continue its descent by another 0.56% overnight.
The tech-heavy NASDAQ-100 (NASDAQ: NDX) and S&P 500 Index (SP: .INX) dropped 1.71% and 1.13%, respectively.
Despite hitting the brakes today, Pilbara Minerals shares have rocketed 40% in the past month.
Another reason why could be the relative strength index (RSI) which hit 87 on 13 August and stayed around that level for the past two days.
The RSI is a momentum oscillator that is used to assess the strength or weakness of a share price. Normal levels range between 30 and 70, but anything outside this tells us if the share price is cheap or expensive.
In this instance, when the RSI touched 87, Pilbara Minerals shares were considered to be overbought by investors. Hence, this caused a retracement in the RSI as well as the share price today.
Currently, the RSI for Pilbara Minerals shares stands at 73 (still within the acceptable range below the sell signal).
About the Pilbara Minerals share price
Regardless of today's decline, the Pilbara Minerals share price has rocketed by 95% over the past 12 months.
It's worth noting that the company's shares reached as low as $1.975 on 14 June before storming to record levels 3 months later.
Based on the current price, Pilbara Minerals presides a market capitalisation of roughly $14 billion.
