After a pullback the last few days, Rare earth miners are staging a late day rally. Why is this happening? Several possibilities, including big Tech earnings by Apple. These rare earth minerals are vital for building technology products like the ipod, disk drives, Mp3 players etc. Another very likely reason for the spike in shares is the Fed pledging this afternoon to keep interest rates at historic lows through late 2014…that is a formula that spells a weak U.S. dollar and rising metals prices to me…that all equals rapid inflation to me…Keep an eye on a few of my favorite stocks in the rare earth space, which include: Molycorp, Avalon Rare Metals, and Lynas Corp. Tickers MCP, AVL, and LYSDY.pk. All of these stocks are up over 5.5% on big volume today. MCP is up over 7% and Lysdy.pk is spiking 10%…Show me the money honey!!!
Remember my previous post on buying the Call Options on AVL…that trade is still in full effect and I like the Call Options on Molycorp(MCP) as well. I would think about buying the MCP Mar 17, 2012 30 strike Call Options for 2.35 a contract, with a slight pullback in the shares of Molycorp. I am also still a big fan of the AVL Mar 17, 2012 3 strike Call Options for .25 cents. Rare Earth Miners have room to run much higher in my opinion. So, Stay tuned to Optionshoney.com for more news on the Rare earth miners and options plays!!
Chart Courtesy of Fidelity Investments: