The entire market has been trading the AI stocks and the chips for the last month (I was one of them). But there’s another hot sector that I’ve been quietly making money on…
1 rare earth stock is at the top of my watchlist…
But before I talk about that 1 stock, I need to explain why it’s at the top of my list.
So, the sector leader in rare earths is MP Materials Corp.
But the leader of the pack is always crowded. It moves slowly and steadily. It climbs, but it’s a multi-billion-dollar company, and it’s tough for something that big to print the kind of gains I want.
The names that can really blast are the smaller, faster movers under the sector leader.
In the SpaceX run, the “sympathy space sector” names ran on pure hype with mostly nothing under them.
They returned some insane gains, but if you held them overnight, you were running a huge risk.
MNTS jumped 43.7% on June 11 and closed at $16.30, then gapped down 26.7% the next morning and bled to $11.95.
On the same morning MNTS tanked, SPCE looked exactly the same…
Anyone holding those overnight got torched on the open.
So how do you know when a secondary name in a hot sector has legs? And which ones are more likely to burn your account when they gap down overnight?
I held one rare earth stock overnight for a 7.9% gain that I sold into strength the following day. But I only held it overnight because I knew what to look for…
My #1 stock right now in rare earths is USA Rare Earth, Inc.
It closed at $20.33 on June 10 and $24.64 on June 18, about 21 percent in a week. Every pullback bottomed above the last one. It finished June 18 right near its high of $24.79.
I caught a piece of it already:
I held a fast secondary runner overnight (and I almost never do that with a crazy spiker).
Most days I take the move, and I’m out by the close. Too risky to hold overnight.
I held this one because it had a catalyst. But it’s not like I completely understand what all of these minerals actually do…
You don’t need a PHD in geology to trade rare earth stocks. But a little bit of looking under the hood goes a long way.
Rare earths are the metals that make the magnets inside defense hardware, EVs, and the electronics you use every day. China has owned the production of these materials for a long time. The U.S. has barely had a way to make its own.
But the U.S. government is trying to break its dependence and fund domestic producers.
That’s a major catalyst. So I had more conviction on USAR than I’d have on a normal spiker. It could’ve gapped down overnight, sure. But the catalyst gave me enough conviction to size in and hold overnight.
My Playbook for USAR
The gameplan is simple:
- Set an alert at the level USAR has to reclaim (or hold) a prior high or a round-dollar number on rising volume.
- Buy only when it triggers and holds on volume.
- Scale out into strength.
- Move your stop to your entry after the first piece comes off.
- If the level breaks, you’re out.
Tim Sykes and I are going live with a free briefing we’re calling The 4,900% Wealth Window, and we’ll walk you through the next setup exactly the way I just walked you through this one.
The trigger is a landmark SEC decision that I believe opens the next window on June 29. The last time this window opened back in 2020 when I grew my account from $160,000 to over $8 million in just over one year.*
I’ll reveal the full gameplan and my number one stock pick live. Reserve your free spot here.
Stay sharp,
Jack Kellogg
*Past performance does not indicate future results
