What happened? Well prices started their way up to the moon, came maybe half way up there and then came back down and went straight into the ground. About 4 years later nobody is talking about them and if they are talking about them they are talking in a negative way.
For Molycorp there is talk of how the company may not be able to continue it's operations and it may shut down unless it gets financing. But let's look what the charts say:
Molycorp recently staged the biggest rally since it's downtrend began in 2011. The rally was impulsive in 5 waves and it made a higher high on high . It's make it or break it now for Molycorp so I suggest a trade: going long Molycorp with a position size of 0.5% of trading capital (not the stop but the whole position). For example if your total trading capital is 100,000$ you should invest about 500$ in this trade. Either the stock will go to 0 or you'll make 50 times your money. Consider this trade an out of the money option trade with the difference that the option doesn't lose value over time and it doesn't expire (unless the company goes bankrupt).
You may have the temptation to put more money in the trade but this is a high risk trade so I don't recommend it. If the company declares bankruptcy tomorrow don't say I didn't warn you. The rule of thumb for profit taking on these kinds of trades is for every multiple of 10 the stock goes up, take 10%-20% of the position off the table and take profits. Who ever chooses to go with the trade good luck.
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