Sigma Lithium (SGML) Surges 15.6% on Lithium Price Rally Amid China’s Tax Shift – What’s Next?

Summary
• Sigma Lithium (SGML) rockets 15.6% to $15.62, hitting an intraday high of $15.66
• China’s tax policy shift on lithium exports sparks global supply concerns
• Turnover surges to 3.92 million shares, signaling aggressive institutional positioning
• 52-week high of $16.60 remains within reach as demand for EV batteries accelerates

Today’s explosive move in Sigma Lithium reflects a perfect storm of regulatory shifts in China and surging demand for lithium in the EV and energy storage sectors. With the stock trading near its 52-week high and technical indicators flashing bullish signals, investors are scrambling to position for a potential breakout. The key question: Is this a short-term spike or the start of a sustained rally?

China’s Tax Policy Shift Sparks Lithium Price Surge
Sigma Lithium’s 15.6% intraday surge is directly tied to China’s abrupt phase-out of VAT export rebates for lithium and battery products, announced on January 9. This policy, effective April 2026 and fully phased out by January 2027, has triggered a front-running frenzy among global buyers to secure lithium supplies before prices spike. Chinese lithium carbonate futures surged 9% to $22,372 per metric ton, while physical spot prices jumped 13,000 yuan per ton in a single session. As a low-cost producer with operations in Brazil, Sigma Lithium stands to benefit from higher prices and reduced competition from subsidized Chinese rivals. The stock’s sharp move also reflects broader optimism about the energy transition, with lithium demand from EVs and grid storage expected to grow 31% in 2026.

Lithium Sector Rally Gains Momentum as SQM and Albemarle Outperform
Sigma Lithium’s surge outpaces its peers, but the broader lithium sector is rallying on the same tailwinds. Sociedad Química y Minera (SQM) gained 14%, while Albemarle (ALB) climbed 4.26%, reflecting investor confidence in global supply constraints. Unlike SGML, which focuses on claystone deposits in Brazil, SQM and ALB rely on brine and hard-rock extraction, making them more sensitive to near-term price volatility. However, all three stocks are beneficiaries of the Inflation Reduction Act (IRA) and the EU’s Critical Raw Materials Act, which are accelerating regionalization of supply chains. The sector’s outperformance underscores a shift from speculative EV bets to strategic commodity plays.

Options and ETFs to Capitalize on Lithium’s Bullish Momentum
• 200-day average: $7.39 (well below current price)
• RSI: 58.69 (neutral to overbought)
• MACD: 1.22 (bullish divergence from signal line 1.31)
• Bollinger Bands: Upper at $16.47, Middle at $13.03, Lower at $9.59
• Support/Resistance: 30D support at $10.52, 200D support at $5.95

Technical indicators suggest Sigma Lithium is in a short-term bearish correction but remains in a long-term bullish trend. The stock is trading near its upper Bollinger Band, with RSI approaching overbought territory, signaling potential for a pullback or continuation. Key levels to watch: $15.66 (intraday high), $14.04 (intraday low), and $13.03 (20-day moving average).

Top Options Picks:
• SGML20260116C15 (Call, $15 strike, Jan 16 expiry):
- IV: 150.50% (high volatility)
- Leverage Ratio: 10.50% (moderate)
- Delta: 0.64 (moderate sensitivity)
- Theta: -0.1756 (rapid time decay)
- Gamma: 0.1344 (high sensitivity to price changes)
- Turnover: 7,930 shares (liquid)
- Payoff at 5% upside ($16.40): $1.40 per contract
- Why it stands out: High gamma and IV make this call ideal for a short-term rally, with theta decay manageable given the Jan 16 expiry.

• SGML20260116C17.5 (Call, $17.50 strike, Jan 16 expiry):
- IV: 151.35% (high volatility)
- Leverage Ratio: 31.50% (aggressive)
- Delta: 0.307 (moderate sensitivity)
- Theta: -0.1344 (moderate time decay)
- Gamma: 0.1260 (high sensitivity)
- Turnover: 6,194 shares (liquid)
- Payoff at 5% upside ($16.40): $0.00 (out-of-the-money)
- Why it stands out: High leverage and gamma make this a speculative play for a breakout above $17.50, though it’s currently out-of-the-money.

Action: Aggressive bulls may consider SGML20260116C15 for a short-term rally, while SGML20260116C17.5 offers high-risk, high-reward potential if the stock breaks above $17.50.

Backtest Sigma Lithium Stock Performance
The backtest of SGML's performance after an intraday surge of more than 16% from 2022 to the present shows mixed results. While the 3-day win rate is 48.47%, the 10-day win rate is slightly lower at 45.85%, and the 30-day win rate is 58.30%. The maximum return during the backtest period was 9.45%, which occurred on day 59, indicating that while there is potential for gains, the strategy's consistency could be improved.

Sigma Lithium’s Rally Gains Strategic Momentum – Watch for $16.47 Breakout
Sigma Lithium’s 15.6% surge reflects a confluence of regulatory shifts in China and surging demand for lithium in the energy transition. While the stock faces near-term resistance at $16.47 (upper Bollinger Band), a breakout could signal the start of a multi-year bull run. Investors should monitor Chinese export volumes in Q1 2026 and the pace of BESS deployments, which are expected to drive 31% of global lithium demand this year. For now, the SGML20260116C15 call offers a balanced way to capitalize on the rally, while Albemarle’s 4.26% gain highlights the sector’s broader strength. Watch for a $16.47 breakout or a pullback to $13.03 for entry.