After watching Fast Money last night on CNBC and hearing what they had to say about Molycorp, Inc. (MCP), I came in a little bearish this morning on the rare earth plays. Boy did that pay off. MCP, Rare Element Resources Ltd. (REE), Avalon Rare Metals Inc. (AVL), and China Shen Zhou Mining & Resources Inc. (SHZ) are getting smoked today on profit taking after huge runs. I made good money in AVL and MCP, less so in REE.
The lesson of the day is, “don’t be a pig.” These things paid us off nicely mostly on the long side for months and there was no reason for us to get greedy and not take profits. I think these stocks will certainly continue to provide opportunity in both directions in the future, but as of this writing, I am hands off the rare earths until possibly later this afternoon.
I also had a great trade in an old favorite of mine, China Agritech Inc. (CAGC). CAGC has a great looking pennant (bull flag setup) on the daily and just broke out of it this morning. The first target here is the 200-day SMA at 13.87. Through that it has a gap to fill up to 15.07.
So I have traded a few tickets today, up good money, content on sitting back and letting the next trade come to me. I am currently long LVS puts and CAGC. Let’s see what this afternoon will bring.
*DISCLOSURE: Long CAGC; Short LVS
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