The Galaxy Resources Limited (ASX: GXY) share price has been on an impressive run over the last six months and risen a staggering 127%.
This means that the lithium miner's shares are now rapidly closing in on their all-time high of $4.08.
Can they continue to climb higher?
Following the recent lithium pricing update by rival Orocobre Ltd (ASX: ORE), I would say that Galaxy's shares are about fair value based on the prices being commanded by producers at the moment.
In light of this, I wouldn't expect its shares to climb notably higher in the coming months, making it a hold for me.
However, should demand continue to outstrip supply, as Orocobre's management has predicted, then prices could increase further in 2018 and lift Galaxy's shares.
But even so, I would suggest investors look to get in at a cheaper price in order to gain a more compelling risk/reward.
What is a good buy price?
I think that investors that can snap up shares at $3.50 will do very well from an investment in Galaxy. Especially if they are prepared to hold onto their shares for the long-term.
Due to its three world-class assets, high prices, and growing demand for lithium due to the seismic shift to electric vehicle usage, I believe Galaxy could outperform the market significantly over the next five years.
Just as long as a major miner like BHP Billiton Limited (ASX: BHP) doesn't launch a takeover in the meantime, that is.
