Continued Rare Earth Producers Technical Analysis – One Potash Junior

I’ve had a lot going on over the past week and I’m gonna have to keep this one quick as I have another article to work on tonight however I wanted to continue on with the updates on these rare earth producers given the wild swings that have taken place since my first article last week.


MCP was pushed high during the last two trading sessions, yesterday ending in a doji, and today ending in an engulfing candle. There’s a lot of calls on the $50 strike which expires tomorrow and though it has made a run at $50 during the past two sessions, it hasn’t been able to stay in that upper range and I don’t see this as a buy just yet.

The wedge that I drew on this chart last Thursday played out in textbook fashion with more than convincing volume. If you had the cash to buy this when I suggested it, then you are already up 33%. Unfortunately for myself, my bid of .77 never executed when I had it open on Tuesday! I don’t chase charts higher and expect a Great Western/Stans Energy type pullback after this big move. I’ll be a buyer again when this thing comes back down.

The last two weeks of trading almost looks like a bear pennant but the trading appears to have flattened out as the volume is weakening and there has been multiple tests of $2.25 support. I went long at $2.34 which is a favorable discount from $3, if this thing breaks down, it’s got $1.75 and $1.50 as support but I don’t suspect that to happen.

This thing just looks so oversold to me… support may have been readjusted below .90 because I don’t see how support could have truly broken given the circumstances. Today’s doji candle could be the beginning of a reversal in the trend, momentum has slowed down on the stochastics as well. I’m definitely a buyer here.

I didn’t do AVL last week but I figured due to the recent activity, I think they’re worth including. AVL continues to break different resistance levels as it is coming out of a cup and handle formation. I think it will move higher, probably have an RSI peak soon and eventually retrace a little bit as it is fairly overextended from that support trendline.

Again due to recent activity I also want to include this Potash junior Allana Resources (ALLRF). Big moves here over the last two months but it looks like a bear pennant is forming here from the last six days of trading and I want to either wait for this to break down, or wait for the market to present a buy signal before entering any position.

About Aaron Basile
Day Trading and Swing Trading Ideas, Certified Personal Trainer, Power Bodybuilding, Avid Sports Fan (NBA, NFL)

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