Sweet spot for rare-earth stocks
The correction is not yet complete, but some favorable buying opportunities may pop up soon in this high-risk, high-reward sector.
- Related reading: Gain an Edge with Volatility Analysis
- There is initial support now at $57 and then at $55.82, which marks the recent lows
- The 50% retracement support level is at $53 with the weekly uptrend, line a, in the $51.70 area
- The lower weekly Starc band is at $49.90 with the 61.8% support level at $47
- The weekly on-balance volume (OBV) did confirm the recent highs but is now just below its weighted moving average (WMA). It is well above support at line b. The daily OBV (not shown) is positive
- There is first resistance now in the $65.50-$66.40 area and then in the $68 area
- The weekly chart shows that REE has been in a broad range with resistance at $16.55-$17.92 and support at $9.90 (line c)
- The 50% support level from last summer’s lows is at $9.50 with the weekly Starc- band at $8.60. The major 61.8% support stands at $7.62
- Weekly OBV has seen some wide swings, but it did confirm the highs early in the year
- Daily OBV and the chart pattern favor a further decline
- There is initial resistance for REE in the $13 area with much stronger resistance at $14.90-$15
- There is converging support on the weekly chart in the $5.40-$5.60 area. This corresponds to the weekly Starc- band, the 50% retracement support level, and the former resistance at line a
- The weekly uptrend, line b, is in the $4.40 area
- The weekly OBV did confirm the highs and it still holding above its rising weighted moving average. The daily OBV is just barely positive
- Initial resistance is now at $7.80 with further resistance in the $8.60 area
- REMX hit $28.91 in early April and has a recent low of $24.89. In March, REMX was as low as $20.19
- The minor 50% retracement support is at $24.60 with the 61.8% level at $23.60
- The daily OBV has traded in a narrow range for the past two months and is acting stronger than prices. The weekly OBV (not shown) did confirm the recent highs
- There is first resistance for REMX in the $27.50-$28 area
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John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.
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