MP Materials (MP) is poised for an important upside breakout. In our December 10 review we wrote that "We have been checking out MP since April and have recommended other rare earth plays in the past year or so. Continue to hold MP longs. Risk to $37 now. Our price targets are $72 and then the $80 area."
Let's check out the charts again.
In this updated daily bar chart of MP, below, we can see that prices sold off into early February and would have stopped out longs at $37 on the way down. Prices have quickly rallied back towards the highs. MP is trading above the rising 50-day moving average line and above the rising 200-day line.
The On-Balance-Volume (OBV) line shows a slow and steady rise from May telling us that buyers of MP have been more aggressive for several months now. The Moving Average Convergence Divergence (MACD) oscillator has just crossed above the zero line for a fresh outright buy signal.
In this weekly Japanese candlestick chart of MP, below, we can see that prices have been climbing higher from the lower shadow seen in January. Prices are knocking on an upside breakout and a close above $50 should do it. MP is trading above the rising 40-week moving average line.
The weekly OBV line has improved from late January. The MACD oscillator is crossing to the upside for a new buy signal.
In this daily Point and Figure chart of MP, below, we can see a price target in the $67 area.
In this weekly Point and Figure chart of MP, below, we can see a $70 price objective being projected.
Bottom line strategy: Traders could repurchase shares of MP on a close above $50. Risk to $42 this time. The $67-$70 area is our first target.
