PLL Stock Price – Piedmont Lithium's profit-taking may turn into a buying opportunity, here is why

• NASDAQ: PLL stabilized above $25 after surging by 236% on Monday. 
• A five-year binding deal with Elon Musk's Tesla is behind the extreme volatility.
• Piedmont Lithium has more room to rise amid growing global interest. 

The best parties often end with a hangover – but perhaps a short-lived one ahead of the next feast. Investors in Piedmont Lithium (NASDAQ: PLL) gave up on Tuesday (down 31.41%) some of the huge gains from Monday.

The share of the Australian firm dove to below $30 levels on Tuesday and then profit-taking continuing to take place on Wednesday, but shares finally stabilized on Thursday, finishing the session with an 8% gain, at $25.31. PLL had closed Monday's session at $37 after hitting an intraday peak of $54.50. 

The projected drop in Piedmont Lithium's shares may provide a buying opportunity. Here is why.

PLL Stock News

NASDAQ: PLL leaped after signing a five-year sales agreement with Tesla, the world's most prominent electric vehicle company. Piedmont will provide spodumene concentrate to Elon Musk's firm. Spodumene a lithium mineral that is usually extracted from pegmatite rock. 

Enhancing lithium-based batteries is critical to the EV industry. Customers are often worried that the batteries of their electric cars will run out. Any improvement implies more sales for carmakers – and for miners extracting the precious materials.

Piedmont is based in Australia, a country that has been at the forefront of mining more common metals such as iron and copper to fuel China's growth. However, the relevant operation is in North Carolina, on US soil, where Tesla is based. 

The deal with Musk's company is substantial as it is forecast to generate between 10% to 20% of Piedmont's income. However, the cash from Tesla also allows the Australian firm to invest in further extraction. PLL's profile has been elevated after the agreement with the Musk – a celebrity. 

Other firms such as Nikola, NIO, and Workhorse, – which also benefits from Tesla's Battery Day – may also become interested. Moreover, spodumene may also be used in batteries beyond the automotive industry. 

Overall, Piedmont's Tesla accord could be more than a huge deal but also open the door to additional sales and a rising share price for NASDAQ: PLL.