It was another strong day for the Vulcan Energy Resources Ltd (ASX: VUL) share price, continuing to rebound from its recent lows.
Shareholders will be pleased that the clean lithium developer's shares moved further away from its 52-week low of $4.76 reached in late June.
At market close on Tuesday, Vulcan Energy shares finished up 5.23% to $8.85 apiece – still some way off its year-to-date high of $11.18 on 4 January.
Let's take a look at what is driving these recent gains.
Vulcan Energy shares stage a mini comeback. But can it last?
Investors are bidding up the Vulcan Energy share price as the sector recovers from the fallout induced by Goldman Sachs in June.
It appears that the market has shrugged off the bearish news and is focused ahead on Wall Street's earnings season.
Interestingly, the major averages have rallied this month on the back of better-than-expected results.
This has driven the Dow Jones higher along with the ASX following closely behind.
For context, the S&P/ASX 200 Materials (ASX: XMJ) sector touched a daily high of 16,184 points, up 1% before slowly retracing today.
With Vulcan Energy shares accelerating, it's worth pointing out that its relative strength index (RSI) is currently around 72.
The RSI is a momentum oscillator that is used to assess the strength or weakness of a share price. Normal levels range between 30 and 70, as anything outside reveals if the share price is attractive to buy, or expensive.
In this case, Vulcan Energy shares are showing signs of being overbought and a pullback may happen sometime soon.
Vulcan Energy hare price snapshot
Bearish sentiment mixed with volatility has led the Vulcan Energy share price to fall 35% over the last 12 months.
The company's shares reached an all-time high of $16.65 in September 2021, before moving on a downward channel.
Whether it can regain these highs largely depends on the price of lithium as well as Vulcan Energy's progression on its Zero Carbon Lithium Project.
Based on today's price, the company commands a market capitalisation of around $1.27 billion.
