ARE RARE EARTHS A GOOD BUY HERE?

I had a discussion about the rare earth elements and the ETF for those firms (REMX).  These firms have all clearly had great bounces and REMX is actually now in an upward channel.  Upper resistance in the upper channel is $26.40, if we charge through there we could see $27.00 quite easily. 

If REMX bounces around the channel top and heads back down we could see a move to $25.00.
While the purchase of REMX gives you exposure to many rare earth metal miners, most folks that are in this trade aren't in it for a 5% move, they want more potential for upside and don't mind the volatility.  Let's look at another option here for some rare earth dynamite.

REMX

MCP
While REMX looks like a fine set up that is still bullish, please view MCP (Molycorp).  MCP has rocketed off a low around $51.50 that was posted almost 10 days ago!  Wow!  Just observing this move makes we want to hold off on buying into that, expecting some sort of slow down and retracement.  The bulls will need to observe $62.00 closely.  If MCP can powerfully move through that resistance level then a move to $66 or even $71 could be at hand.  Those that feel like the stock needs a breather could take a short here and work for a move back down to $57.50.

The bottom line here is that if the overall macro picture continues in the same vein of a stronger Euro and weaker dollar, we'll have the underpinnings of a sizable move in MCP.  If for some reason reality wakes from its 2 year slumber and the USD drives higher, MCP could face substantial headwinds along with the rest of the equity markets and commodity markets.   

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/