I'm Selling Ramaco, Buying This Rare Earths Competitor After U.S.-China Update
It's time to protect this position as rare earth miners tumble.
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Good news is bad news. For some anyway.
Share prices for rare earth miners are tumbling on Monday morning as traders are betting on an extension later this week of the current trade truce between the U.S. and China.
USA Rare Earth (USAR) is down more than 8% overnight after giving up 2% on Friday. MP Materials (MP) , even with federal backing, is down more than 5% overnight even after rallying on Friday. On top of all of that, "Stocks Under $10" holding Ramaco Resources (METC) is down more than 4% overnight after giving up more than 3% on Friday. The stock apexed at $57.80 on October 15 and has come in since just as quickly as it had rallied.
Time to Protect This Position
Maybe well past time. While we're still up more than 100% on this name, we are still talking about a firm that loses money and is expecting just $131 million in revenue generation when it reports its third quarter financial results on Monday evening. Wall Street is looking for a GAAP EPS of -$0.30.
About a week and a half ago, I gave readers an add level at the 21-day EMA which was pierced last Tuesday and the stock finally lost contact with on Friday. I also gave readers the 50-day SMA as a panic point, which is a level that the stock is approaching now. I am going to make a sale on Monday morning (probably cutting this position in half) ahead of earnings just to protect my profits.
I can always buy the shares back later this week should the 50-day SMA hold, but this is found money, and I do not want to risk losing it all. I will hold onto a portion of my shares. I also intend to move the proceeds from this sale into another "Stocks Under $10" name, Lithium Americas (LAC) . This one that has not yet bloomed and at this juncture possess a better, in my opinion, risk/reward proposition
Readers will see that this one, while the cup-with-handle pattern that we talked about appears to have possibly failed, still has not lost contact with its 21-day EMA.
In Other SU$10 News
Fan favorite and the greatest trade in my four-decade career, Palantir Technologies (PLTR) continues to execute at an extraordinary level. On Thursday, Palantir announced that the firm had expanded its partnership with Lumen Technologies (LUMN). Lumen agreed to spend more than $200 million on Palantir's software over the next few years.
Bloomberg News is reporting that Palantir Technologies will sign a letter of intent on Monday with Poland's Ministry of Defense. Details of the agreement were not disclosed, but Poland is now NATO's largest spender on national security in terms of percentage of GDP.
As long as Russia remains kinetically hostile towards Poland's neighbors and psychologically hostile towards the NATO alliance in general, I would think that this relationship could truly blossom. The "Stocks Under $10" portfolio reiterated its $218 target price for PLTR last week, which remains the high on Wall Street.
At the time of publication, Guilfoyle was long METC, LAC and PLTR equity.
