An Update on Rare Earths

We introduced the topic of rare earths investing back on July 24 and wrote that, "If you want to get some long exposure to rare earths you could consider the VanEck ETF (REMX) . If you are looking for an individual stock then I suggest a lot of research."

In July REMX was trading around $41 and now it stands near $45. Let's check again.

In this daily bar chart of REMX, below, we can see that prices have rallied into early August and then corrected down to late September for a test of the 200-day moving average line before renewed gains to new highs for the move up. Prices are above the rising 50-day moving average line.

The On-Balance-Volume (OBV) line has been improving in recent weeks. The Moving Average Convergence Divergence (MACD) oscillator is turning up from above the zero line for a new buy signal.

In this weekly bar chart of REMX, below, we can see a large bottom formation. A weekly close above $45 will be an important upside breakout.

The 40-week moving average line is ready to turn higher.

The weekly OBV line has been rising since last August and tells us that there has been some considerable accumulation (buying). The MACD oscillator is likely to turn higher from here.

In this daily bar chart of  Zhejiang Huayou Cobalt Co. Ltd. (listed in Singapore  CN:603799) we have the largest weight in the ETF. Prices have been making higher lows since November and we are close to making a new high for the move up. The indicators are bullish.

In this weekly bar chart of Zhejiang Huayou Cobalt, below, we can see a bullish picture and a weekly close above $50 will be impressive.  

Bottom line strategy: You may not be comfortable trading commodities and rare earths and that's okay, but it is an interesting corner of the investing world.

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