Price Forecast:

Bullish Case: Rising demand for rare earths, particularly in tech sectors, could lead to favorable earnings reports, boosting MP’s stock. Current low volatility suggests potential for upward price movement.

Bearish Case: Persisting economic pressures and high implied volatility indicate the potential for further declines in MP's market value, particularly if bearish sentiments increase among investors.

Potential Outcomes:

1. Recovery of demand for rare earths (40%);

2. Continued decline due to macroeconomic pressures (30%);

3. Sideways movement as investors await clearer indicators (30%).

Trading Oracle: Consider a bullish long call spread by buying December $20 calls and selling $22.5 calls, capitalizing on the upward potential while managing risk with a favorable return profile. Rely on current implied volatility for this trade, with a focus on the upcoming earnings date for potential catalysts.

November 17, 2024