Powering Up: It Might Be 2010 All Over Again For Lithium ETF

When the Global X Lithium ETF

debuted in July 2010, the fund was not met with the usual consternation and criticism reserved for

. Rather, the timing seemed right as everyone and his sister was talking about lithium as a valid investment thesis due to increased demand from the automotive and technology industries. That helped the Global X Lithium ETF got off to a fine start, but things changed last year. A sagging global economy didn't help matters, nor did the fact that lithium supplies aren't exactly rare. Last year was so rough for LIT, some had to wonder

. There's no need to send out a search party because LIT is experiencing a renaissance of sorts in 2012. Quiet as it may kept, the ETF was up 20% year-to-date at the start of trading today. There are some issues to consider before backing up the bus on LIT. Trading around $17.30 today means the ETF is merely back to an area it resided in August 2010 following last year's nasty fall from grace. So some may argue it has been a lost 18 months for the fund. Second, there has been speculation that Apple

will eventually

without lithium. That would certainly skew the supply/demand dynamic out of LIT's favor. The good news is lithium is an integral ingredient in the production of electric cars like the plug-in Prius and the new Chevy Volt. In other words, if oil prices stay elevated, forcing gas prices higher, penny-pinching consumers may embrace smaller, eco-friendly cars. That could be a catalyst for more upside for LIT this year. Even with all of its trials and tribulations last year, LIT is still home to over $103 million in assets under management, making it one of the larger ETFs issued by Global X. The technicals look appealing as the fund has just cleared its 200-day moving average and the chart indicates LIT could run another $2-$3 without encountering much material resistance. Arguably, a lot of investors have heard of Chemical and Mining Co. of Chile

. That's LIT's top holding at over 18% of the fund's weight and probably the lithium stock investors are most familiar with. Think twice before making SQM your lithium play because LIT has doubled the returns of SQM on a year-to-date basis. For now, the medium outlook for lithium demand and LIT appears favorable, but how much longer LIT's bull run goes unnoticed is anyone's guess.