Rare Earth Metals Break Out!

JC Parets
August 2, 2020

Did you see the Rare Earth Metals Index get back above its 2016 lows?

Should we even bother to acknowledge their existence? We have Tech in the US and don't have to go dumpster diving into these little tiny serial underperformers!

While that is certainly true, today I want to point to something that we haven't seen in a long long time: Rare Earth Metals NOT making new lows.

You see, this in and of itself, is a huge development. I'm pretty sure these stocks were designed to just always go down. It's like a slot machine, just keep putting money in, and you'll eventually lose it all. Rare Earth Metals stocks have kind of been like that been exactly like that.

BUT, this is no longer the case, IF we are above those 2016 lows:

Click on Chart to Zoom In

From a Technical standpoint, I see the potential for a Failed Breakdown confirmed by a Bullish Momentum Divergence.

One of the many problems with this sector, however, is the lack of liquidity and vehicles to invest in. They lack market cap, they lack liquidity and they lack US ADRs. Remember that most of these companies are Chinese or Australian-based.

For some investors, there are Private Companies worth looking into. For others, this ETF is fine. And for many investors around the world, your local exchange could give you that exposure.

What this post is designed to do is to simply make you aware of the change in tide. That's all.

What you choose to do with this information will depend on your time horizon, risk parameters and overall objectives.

But I think it's worth pointing out that the trend here is NOT down, for like the first time ever.....

$34 in $REMX. If we're above, I think this is a space worth a second look.

Let me know what you think!

JC

 

Filed Under: