We recently started a series called “Penny Stock of the Day”. These ideas are geared towards traders with an extremely high risk appetite.
Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.
Penny Stock of the Day: Lithium Argentina AG (NYSE: LAR)
Today’s penny stock pick is the development-stage lithium producer company, Lithium Argentina AG (NYSE: LAR).
Lithium Argentina AG focuses on advancing lithium projects in Argentina. The company owns interests in the Cauchari-Olaroz project located in Jujuy province; and the Pastos Grandes project located in Salta Province of Argentina. The company was formerly known as Lithium Americas (Argentina) Corp. and changed its name to Lithium Argentina AG in January 2025. Lithium Argentina AG (LAR) is now a pure-play lithium producer based in Argentina, while Lithium Americas Corp. (LAC) focuses on the Thacker Pass project in the US.
Website: https://www.lithium-argentina.com/
Latest 10-K report: https://investors.lithium-argentina.com/static-files/f2a31f3a-e522-4a03-8eed-34d36bd6b552
Analyst Consensus: Not covered by Wall Street Analysts.
Potential Catalysts / Reasons for the Hype:
- On August 12, 2025, Lithium Argentina and Ganfeng Lithium announced a Framework Agreement to form a new joint venture (JV) that will consolidate the Pozuelos and Pastos Grandes salt lake basins in Salta, Argentina. The JV allows for regional growth consolidation, creating a global, scalable lithium operation in Argentina. It aims to harness new technologies, achieve economies of scale, and leverage the partners’ combined expertise to support the global energy transition. The Lithium Argentina (LAR) and Ganfeng Lithium joint venture (JV) is progressing toward Final Investment Decision (FID) by consolidating the Pozuelos and Pastos Grandes lithium brine projects into a unified platform.
- The due diligence by POSCO Argentina S.A.U. has now been substantially completed, with several minor items remaining outstanding. The definitive POSCO agreement closure is expected soon post due diligence.
- The stock is also garnering interest due to U.S. equity stake rumors in peer Lithium Americas (LAC).
- LAR’s Q3 2025 earnings report, expected around late October, is anticipated to provide production updates. The company’s Q2 2025 report noted a focus on increasing production volume, stabilizing operations at higher levels, and reducing costs, with management confident in achieving their full-year 2025 production guidance of 30,000 to 35,000 tons.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Breakout From Flag Pattern: The daily chart shows that the stock was in a strong uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern, which is a continuation pattern. The flag pattern is marked in purple color in the chart. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend, which is an uptrend in this case.
LAR – Daily Chart
#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.
#3 Price above MAs: The stock is currently above its 50-day as well as 200-day SMA, indicating that the bulls have currently gained control.
#4 Bullish Stoch: The %K line of the stochastic is above the %D line, indicating possible bullishness.
#5 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 50-week SMA, indicating that the bulls are gaining control.
LAR – Weekly Chart
#6 MACD above Signal Line: In the weekly chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for LAR is above the price of $3.55.
Target Prices: Our first target is $5.00. If it closes above that level, the second target price is $6.00.
Stop Loss: To limit risk, place a stop loss at $2.80. Note that the stop loss is on a closing basis.
Our target potential upside is 41% to 69%.
For a risk of $0.75, our first target reward is $1.45, and the second target reward is $2.45. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Potential Risks / Red Flags:
- The company has a history of net losses.
LAR – Consolidated Statements of Operations
- The Company’s co-ownership of Cauchari-Olaroz may result in delays in decision making and disagreement between the parties, which could affect its business, financial condition and results of operations.
- Lithium prices remain depressed, pressuring margins despite cost cuts; few analysts note cautious 2025 close, with risks from EV slowdowns. Volatility of world chemical prices and changes in global production capacities and supply and global demand could also affect the Company’s business, financial condition and results of operations.
- The Company’s business strategy depends in part on developing the Pastos Grandes lithium brine mineral project located in the Province of Salta in Northwest Argentina (the “Pastos Grandes Project” or “Pastos Grandes”) into a commercially viable operation. Even if the Pastos Grandes Project was determined to be commercially viable, there are many additional factors that could impact the project’s development, including terms and availability of financing, cost overruns, litigation or administrative appeals concerning the project, delays in development, and any permitting changes, among other factors.
- Despite being a loss-making company, the executives are being paid significant compensation.
LAR – Executive Compensation
As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!
Happy Trading!
Trades of the Day Research Team
READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.
Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.
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Source: Trades of the Day
