Molycorp, Inc. (MCP) continues to be in every traders arsenal as it has seen a lot of technical action in the last 6 months. MCP has been stuck in a bear trap 4 of the past 5 months as it's bear trend was finally technically broken on 26-November-2012 at $8.68.
For the last month, MCP has seen a nice dead cat bounce off a bearish reversal with a nice Trend Line from $6.00 to $10.20. A break below it's current trend line would signal a potential retest of $6.00 so buyer's here should have a tight stop.
MCP has major resistance at $11.05 (ie. Tier 1.) If MCP were to close above $11.05, the next major resistance would be $16.07 which would complete a gap that it has needed to fill since 2-August-2012.
Currently, the basic materials sector and other industry related companies have seen recent significant pressure as fiscal cliff looms. While most major stocks continue to rise in anticipation of a resolution, there is still a lot of 'lack of' confidence in the commodity space despite the fact that more money printing would be part of the resolution which would in effect would expand the money supply.
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