Lynas Rare Earths (LYC) is the largest producer of rare earths outside of China. Michael (Gable) says that while there are concerns, there is now good buying support for Lynas Rare Earths (LYC) at these levels.
“The market has been concerned about the commissioning of a new processing plant in Kalgoorlie as a replacement for their Malaysian plant,” Michael said.
“The other concern has been the low prices currently being received for their products. “Despite this, a recent market update seems to have exposed the stock as being oversold on these concerns.
“We have noticed that Lynas has now filled the gap in the chart that was created in May.
“Gaps can often prove to be pivot points for stocks.
“This week, on the day of their quarterly result, we saw Lynas make a strong reversal day.
“This is because LYC opened lower in the morning and then closed much higher, forming a “bullish engulfing candle” on high volume (shown in the chart below with the arrow).
“It then followed this up with news that the US Department of Defence was going to reimburse more of the costs of LYC’s new processing plant, which is to be constructed in Texas.
“There appears to be evidence on the chart here that there is now good buying support for LYC at these levels and this makes current prices a buying opportunity,” Michael said.
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