In Awe Of Molycorp (MCP)

The name Molycorp

is on the tip of many short term traders tongues as the stock is posting jaw dropping gains on a nearly daily basis. Many have been waiting for the shares to crater back to earth, but it just isn't happening. Just yesterday, Dahlman Rose upped its price target on MCP to $85. The shares are currently trading at $60.67 after more than doubling in the last month. Molycorp is a development stage producer of rare earth oxide and owns most fully developed rare earth projects outside of China. Recent Chinese export cuts of rare earth elements has set off a speculative frenzy in this sector. These types of stories rarely end well, but one cannot help but feel left out if they are not currently playing MCP from the long side. The stock has shown no real weakness whatsoever in weeks. On Tuesday, when many basic materials stocks are getting hit hard, Molycorp continues to defy gravity. The shares are currently trading up 5.57% at $60.70. It is hard to advocate buying the stock here, as a collapse may be imminent, but the risk may just be worth the reward - if you can find a suitable way to control your risk. The day is likely coming when MCP gaps down 10%-20% at the open, but who knows from what level?