Molycoorp, Inc. - MCP - close: 21.39 change: +1.32

Stop Loss: 20.49
Target(s): 24.95
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Basic material stocks have been crushed in recent weeks over worries of a global economic slow down. Yet it looks like shares of MCP, a rare earth metals company, may have found a bottom. Now this stock, which is very oversold with the drop from $35 in early April under $20, could see a short squeeze.

The most recent data listed short interest at 41% of the 56.6 million share float. That is significant and definitely raises the risk of a short squeeze higher. Aggressive traders may want to open bullish positions now. I am suggesting a trigger to open positions at $22.10 with a stop loss at $20.49. Our target is $24.95.

Trigger @ 22.10

Suggested Position: buy MCP stock @ (trigger)

- or -

buy the Jul $23 call (MCP1221G23) current ask $1.19

Annotated chart:

Entry on June xx at $ xx.xx
Earnings Date 08/09/12 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on June 05, 2011