Historical data shows the stock has risen 29.7% on average after similar setups over the past decade.
MP Materials (NYSE:MP) fell 1.2% to $58.46, extending its losing streak to four sessions as it retests support at its 260-day moving average. Despite the pullback, shares remain up 128% year-over-year, reflecting strong long-term momentum for the rare earth producer.
The stock is trading within 0.75 times the 260-day moving average’s 20-day average true range (ATR), a rare technical setup that has occurred only four times in the last decade. Each prior instance resulted in a higher share price one month later, with an average gain of 29.7%. A repeat of that performance would lift MP to $76.
Short interest may amplify any rally, as 19.2% of the float is sold short, requiring over four days to cover at current trading volumes.