Reader Request – MCP

By | June 22, 2014

A reader requested I take a look at the chart of Molycorp (MCP) and it isn’t pretty. There is a 38% short interest in shares of the stock, and some substantial fundamental reasons for that, and the collapse in price since its 2011 high.
The weekly chart clearly illustrates the carnage.
On the daily chart the last month of price action shows horizontal consolidation between $2.50 and $3.00, during which time the RSI moved above its centerline, the MacD made a bullish crossover, and money flow turned slightly positive.
Would a close above the $3.00 level initiate some short covering? Possibly. Is taking a long position in MCP highly speculative? Absolutely.

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