The Core Lithium Ltd (ASX: CXO) share price is rebounding on Tuesday.
In morning trade, the lithium miner's shares are up almost 8% to 20.5 cents.
Image source: Getty Images
What's going on with the Core Lithium share price today?
Investors appear to have been buying the company's shares today on the belief that they have been oversold in recent sessions.
For example, even after today's strong rebound, the Core Lithium share price is down almost 25% since this time last week.
As a reminder, Core Lithium's shares have been sold off over the last couple of trading sessions due to news that it is suspending its operations to conserve cash.
Combined with its decision to suspend the BP33 underground development, this has analysts at Goldman Sachs warning that it "increases the risk of a gap in production in FY25."
In addition, it has sparked concerns that the company will need to raise capital again in the near future at even lower prices than before.
Should you buy the dip?
With this news dropping while most brokers were on holiday, the jury is out on the Core Lithium share price.
Goldman Sachs currently has a sell rating and 31 cents price target on its shares. However, it notes that its valuation is "not reflective of the strategic update." So, a sharp reduction could be on the cards in the coming days when it adjusts its model. Stay tuned for that.
