Lithium Argentina Surges 11% on Record Production and Expansion Hopes: What's Fueling This Rally?

Summary
• Lithium Argentina (LAR) surges 11.08% to $6.765, hitting a 52-week high of $6.87
• Company announces 2025 production of 34,100 tonnes of lithium carbonate, exceeding guidance
• RIGI applications submitted for 45,000 tpa expansion at Cauchari-Olaroz
• Options volume spikes, with LAR20260220C7.5 seeing 1,178 contracts traded

Lithium Argentina’s stock is experiencing a dramatic intraday rally, driven by a combination of operational outperformance and strategic expansion plans. The company’s preliminary 2025 results show record production and cost efficiency, while regulatory filings for Stage 2 expansion have ignited investor optimism. With the stock trading near its 52-week high and leveraged ETFs like ILIT rising 5.6%, the lithium sector is clearly in focus.

Operational Excellence and Expansion Fuel 11% Surge
Lithium Argentina’s 11.08% intraday jump is directly tied to its announcement of 2025 production results, which exceeded guidance by hitting 34,100 tonnes of lithium carbonate. The company also reported Q4 production of 9,700 tonnes at 97% nameplate capacity, alongside cash operating costs falling below $6,000 per tonne. These metrics, combined with the submission of RIGI applications for a 45,000 tpa expansion at Cauchari-Olaroz, signal operational maturity and growth potential. Investors are reacting to the alignment of production efficiency, debt reduction ($26M in Q4), and clear expansion pathways, which collectively validate the company’s long-term value proposition.

Lithium Sector Rally: LAR Outpaces Peers as ILIT Soars 5.6%
The lithium sector is experiencing broad-based strength, with Albemarle (ALB) up 10.4% and iShares Lithium Miners and Producers ETF (ILIT) rising 5.6%. However, LAR’s 11.08% move outpaces even these leaders, reflecting its unique positioning as a high-growth producer with clear operational milestones. While ALB’s rally is tied to broader market rotation into energy metals, LAR’s surge is driven by specific catalysts: record production, cost discipline, and regulatory progress. This divergence highlights LAR’s potential to outperform as it advances Stage 2 expansion and the PPG project.

Capitalizing on LAR’s Bullish Momentum: ETFs and Options Playbook
• RSI: 66.67 (neutral to overbought)
• MACD: 0.25 (bullish), Signal Line: 0.20, Histogram: 0.05
• Bollinger Bands: Price at $6.765 (above upper band of $6.099)
• 200D MA: $3.256 (far below current price)
• Support/Resistance: 30D at $5.48, 200D at $2.08

LAR’s technicals confirm a strong short-term bullish trend, with RSI near overbought levels and MACD divergence suggesting momentum. The stock is trading well above its 200-day average, indicating a breakout. For traders, the key levels to watch are $6.87 (52-week high) and $6.295 (intraday low). A break above $6.87 could trigger a retest of the 200D MA as support. ILIT’s 5.6% rise underscores sector strength, making it a viable leveraged play.

Top Options Picks:
1. LAR20260220C7.5
• Strike: $7.50, Expiry: 2026-02-20, IV: 88.25%, Delta: 0.438, Theta: -0.0112, Gamma: 0.186, Turnover: 64,850
• IV (high volatility), Delta (moderate directional bias), Gamma (high sensitivity to price moves), Turnover (liquid)
• This call option offers a balance of leverage and liquidity, ideal for capitalizing on a potential $6.87 breakout. With a 5% upside scenario (targeting $7.10), the payoff would be $0.60 per share, or a 13.3% return on the option’s premium.
2. LAR20260515C7.5
• Strike: $7.50, Expiry: 2026-05-15, IV: 83.40%, Delta: 0.528, Theta: -0.0059, Gamma: 0.118, Turnover: 17,492
• IV (moderate), Delta (modest directional exposure), Gamma (reasonable sensitivity), Turnover (adequate)
• This longer-dated option provides time for the stock to reach its 52-week high and beyond. A 5% upside would yield a $0.60 payoff, translating to a 11.3% return. Its lower theta decay makes it suitable for holding through Q1 2026 RIGI approval updates.

Action Alert: Aggressive bulls should consider LAR20260220C7.5 for a short-term breakout play, while LAR20260515C7.5 offers a more conservative, time-insensitive approach. Both contracts benefit from LAR’s current momentum and expansion narrative.

Backtest Lithium Argentina Stock Performance
The backtest of LAR's performance after a 11% intraday increase from 2022 to now shows favorable results. The 3-Day win rate is 55.56%, the 10-Day win rate is 51.85%, and the 30-Day win rate is 65.74%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 30.71% over 30 days, suggesting that LAR can deliver significant gains even after the initial surge.

LAR’s 11% Rally: A Catalyst-Driven Breakout with Clear Path to $7.50
Lithium Argentina’s 11.08% surge is a textbook example of a catalyst-driven breakout, fueled by operational outperformance and regulatory progress. The stock’s technicals and options activity suggest a high probability of testing $6.87 and then $7.50 as the next milestones. Investors should monitor the 200D MA ($3.256) as a critical support level and watch Albemarle (ALB)’s 10.4% move for sector-wide validation. With ILIT rising 5.6%, the lithium sector remains in focus. Act now: Buy LAR20260220C7.5 for a short-term breakout or hold LAR20260515C7.5 for a longer-term play. Break above $6.87 confirms the trend—don’t miss this.