As for Molycorp, REMX’s sixth-largest holding and perhaps the rare earths name most familiar to U.S. investors, the stock is heavily shorted and any good news for the rare earths sector could ignite a short-covering rally in Molycorp that lifts REMX in the process.
“Molycorp the sector leader is trading near book value and still has a major short of over 48 million shares. The shorts may need to cover as it is on the verge of forming a bullish golden crossover of the 50 day crossing above the 200 day. Molycorp has over 200 financial institutions controlling close to 60% of the float. A bullish reversal combined with short covering could lead to an explosive move for the entire sector,” writes Jeb Handwerger.
Market Vectors Rare Earth/Strategic Metals ETF
ETF Trends editorial team contributed to this article. Tom Lydon’s clients own shares of Apple.