Thursday, April 21, 2011

Chartology: After Molycorp's Recent Weakness Where is the Stock Going? (MCP)

Well, that big gap up on the chart would be a logical goal before the stock resumes its uptrend.
The stock closed at $71.47 today and is looking a bit weaker than the last time it was in this vicinity.
Here's Alpha Global Investors, we'll be back after the jump.
 (click to enlarge)

Molycorp, Inc. (MCP) chart analysis ;
1) Clean break out above the $62.5 level
2) Current uptrend too steep ? Probably
3) Stock and sector in a major uptrend
4) Next ? Buy on the dip should be on your mind

Back on April 11 we posted:
Rare Earths: JP Morgan Raises Molycorp Price Target 2nd Time in Two Weeks, Stock Up Another 6% (MCP)
The stock set another all-time high this morning, $72.74 and is currently up 6.27% at $71.40.
I was asked over the weekend when the stock tops. It's close but my best guess is a double top rather than this spike before anything greater than a 15% decline.
Keep your stops loose and your sphincters (both ends) tight....
Since then the stock traded as low as $67.81 (the next day) and proceeded to set all-time closing highs on the 14th, 15th and 16th with the $76.22 print on the 16th being the all time high.

Yesterday's action, down 3.37% on an otherwise broadly up day is cause for concern.
The $60-62.50 range is still a fair target, a little backing and filling before a convincing set of new highs.