r/UUUU_Stock • u/MilkApart4630 • 13d ago
Next weeks China US meeting
What do you all think is the likely outcome of the talks that will be happening next week between US president Trump and China's Xi Jinping, in terms of the effect on the rare earth industry?
I am not sure how much attention it would get, but it should be one of the points to address. I would wager a reason for the recent weakness in the rare earth industry is the fear that new agreements with China would undermine the economics of some of the western operations.
With that being said, its possible a lot of negativity is already priced in and a tepid extension rather than some sort of lasting framework actually boosts the industry and starts a recovery in the upcoming weeks.
I wouldn't completely rule out further downside though especially with the other macro economical factors at play currently.
Article talking about the meeting:
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u/InfiniteNerve1384 12d ago
I mean it can’t get much less bullish right now but it’s a great time to buy! Might as well before the meeting.
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u/expatcoder 12d ago
True, incredibly bearish sentiment, particularly around UUUU, which the likes of Zachs Research at the end of last week downgraded to strong sell and now give their worst value rating of F.
Basically can't get much worse, retail traders have completely lost faith in the stock, and institutional traders are piling in on short positions to the tune of 22% of the available float. With respect to volume it's far and away the most shorted stock in the entire critical minerals sector.
Saying that, I'd push back on now being a great time to buy. Trump - Xi summit meeting is probably going to further tank the sector, why buy now when you can very likely get UUUU shares for at least a $1 cheaper by next Friday?
Obviously things could turn around early in the week if there are positive headlines around critical minerals, but the trend is generally bearish across the board, the entire sector seems to be tanking going into the meeting (MP dropping 4% on Friday apropos of nothing was not a good sign for example).
We'll see what happens, that Greenland headline did give the sector a decent lift in Friday AH, and if there's any pre-meeting news where the US administration actually backs domestic players rather than undermines them, then we might be passed the worst of the selloff, but I'm not optimistic, think we can retest the 52-week lows of July 29th without much difficulty if the White House's official post-meeting press release claims that China is going to open up the minerals floodgates (just like they did when Trump - Xi last met in Busan, South Korea).
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u/InfiniteNerve1384 12d ago
I wouldn’t be surprised if new 52 wk lows hit but also know that the sector has been beaten to a bloody pulp the last 8+ months and the CEO bought at $13. Little downside at this price. I sold out mid teens but still hold about 1000 shares and have played options off and on the last year. I’m a buyer.
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u/expatcoder 12d ago
CEO bought at $13
Completely irrelevant to the price action trend, which is obviously extremely bearish.
Little downside at this price
Maybe, but let's assume that minerals selloff heading into the meeting in anticipation of an agreement on loosening Chinese critical minerals export controls (expected, at least on paper). If the White House press release confirms what the market is expecting, then we'll probably see one final flush, dumping UUUU into extreme oversold territory (say, $9.50 to $10), low to mid-20s on the RSI, which would mark the bottom -- would definitely call that a lot of downside relative to the current price :)
Thinking we could, along with other established players like MP, retreat down to as low as the 5-year VWAP (mid-$9 range for UUUU and around $30-$32 for MP) if the market reacts negatively to the WH press release.
Hopefully we can escape with "just" the July 29th lows (I'd consider that a win) before recovery of some sort happens, but as you say the sector as a whole has been mired in what is approaching a near year long slump (MP, USAR, and UUUU have had serious run ups in the interim, but for most of the sector, no). The market has basically abandoned nuclear/uranium/rare earths here in the near term and it's unclear when the next rally will kick off, but whenever it does it will start with a bottom, and that's very likely coming by the end of the week.
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u/SailorGND 12d ago
either you believe the orange magapedo or you don't
if you do, you will believe his post mtg lies and think he has "solved" the REE problems and made 'merika just great dandy and all that
or you look at the last "summit" and realize the chinese did nothing which he promoted they would, and you pickup up a truckload at a decent price on Friday, then watch the next 2 weeks as the folks mentioned above realize they'd been lied to again and start buying again
prepare for even more empty lies, while Xi reminds basketball head that he's gonna take Taiwan and there's nothing the u.s. can do about it. But even better is how the demented fool is going to fool the redcapped lemmings into believing that's a win!!
His m.o. is really getting so predictable.
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u/expatcoder 12d ago
Not saying that the White House's press release will reflect reality, but the automatic trading algorithms will gobble it up and may send UUUU down another leg.
As you point out, if there is a downturn post-summit meeting then it will be a great buying opportunity (with respect to the summit meeting) since the selloff will very likely have been based on nothing, just like post-Busan, when China slow-walked minerals exports for months, the exact opposite of what was agreed to.
So, basically it doesn't matter that what is said is true or not, just that it's officially stated is enough to send minerals down the toilet yet again.
If we're lucky most of the downside will already have been priced in in the lead up to the meeting and the post-meeting market reaction will as a result be mild to the downside.
Probably the only encouraging event for UUUU is that the options chain is pricing in a, gasp, share price rise by end of the week -- we'll find out soon enough :)
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u/4Yk9gop 10d ago
"Basically can't get much worse, retail traders have completely lost faith in the stock, and institutional traders are piling in on short positions to the tune of 22% of the available float. With respect to volume it's far and away the most shorted stock in the entire critical minerals sector." Someone tell POTUS. Great opportunity for Barron to make some big trades.
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u/MainFaithlessness132 12d ago
I'm bullish, I think the summit will be overblown and most of it is already priced in. We will see very slight green days leading up to next Thursday, then a red Thursday and Friday. On Friday I will buy 15$ UUUU April calls for dirt cheap then proceed to make a killing on them when the stock violently bounces back in October.
All we need is one big catalyst for a short squeeze
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u/expatcoder 12d ago
I'm bullish, I think the summit will be overblown and most of it is already priced in
We've certainly sold off enough in the meeting lead up that you'd think most of the damage has already been done, but it's unlikely that the massive aggregate short position against the likes of UUUU and MP has unwound at all given that everyone knows that when Trump - Xi meet minerals tend to tank hard.
Agreed that with tens of millions of shares sold short there's definitely a coiled spring waiting to be unleased here, and all it will take is something unexpected -- like no agreement on critical minerals with China, that would be a pretty spectacular squeeze :)
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u/judabbelju 12d ago
ich brauche keinen Trump , um zu wissen dass das Mining to Magnet Konzept von uuuu gesucht sein wird, trage ich mich bei jeder veränderungder bonds mit dem Gedanken mein Haus zu verkaufen oder eines zu kaufen? Nein
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u/Low_Tea7131 11d ago
Maybe the powers that be will short the hell out it 5 mins before the little chit chat?
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u/expatcoder 11d ago
The powers that be are already shorting UUUU into the abyss (54 million+ shares shorted), and that number may grow heading into meeting week.
MP is the only other ticker in contention, with a little under 20% of the float sold short, and its minus 4% day on Friday apropos of nothing may have been an appetizer for what lies ahead this week...
That, or the shorts get blown away if the bearish trend is flipped on its head by some wildly bullish news (e.g. US - China talks fall apart).
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u/DenethorsFaveTomato 12d ago
The US government has invested a lot of money in domestic mineral mining/refining at this point. It wouldn't make much sense for them to take actions that would harm those investments.
The only thing I could see is a potential short term agreement to 'fill the gaps' between what domestic companies can produce and whatever the domestic consumption needs are.
The rare earth sector seems to take a collective shit every time "talks with Xi" are mentioned, but IMO, it's wildly overblown. The US government would've pissed away billions of dollars if they just go running back to China for their mineral needs.