“Last week,” Michael said, “I looked at the lithium miner IGO and could see signs on the chart that it had finally bottomed out and was ready to head higher.

“I’m now seeing similar signs with Pilbara Minerals (PLS).

“PLS is a $6 billion lithium miner based in Western Australia.

“It’s viewed as the highest quality in the sector and with $1 billion of cash reserves, has been well placed to ride out the dip in lithium prices.

“PLS has been trending lower for the past two years.

“However, it has recently made a “higher high” by breaking above the May high on good volume.

“It’s early days but this could be a first step in PLS establishing a low and breaking the downtrend.

“When stocks break downtrends, they start by making a higher high and a higher low. “Making further higher highs and higher lows is the sign of an uptrend.

“Although we can’t say that PLS is making an uptrend yet, it has at least overcome the first hurdle to breaking the downtrend.

‘PLS is therefore a buy here for traders looking to get in early.

“More conservative investors can wait for the uptrend to establish itself.

“An initial target from here would see PLS trade up towards $2.50 to $3, which represents a healthy trade for the next few months,” Michael said.