Rally In Rare Element Resources (REE) Strikes Out

Posted by barkand on January 11, 2012 under Candlestick charts | Be the First to Comment

Just a quickie today on Rare Earth Resources (REE).

This is one of those “rare earth” names that has been subject to speculators running hot and cold. REE lost more than half its value in the seven weeks from early November to late December. Then reclaimed all of it in just seven days, and on incredibly heavy volume.

Alas, the rally has come to and end, at least temporarily. Consider:

Strike 1 – Prices had reached the previous high from November

Strike 2 – REE was more than 50% above its 20-day moving average

Strike 3 – The last 2 days produced a classic “dark cloud cover” candlestick pattern

We are not willing to guess how low it will go – it might just trade sideways for a while – but we suspect that anyone buying here in the low 6s will regret not being more patient.