There has been a lot of focus on the Senate’s “Inflation Reduction Act,” which looks to spend $369 billion on climate change. Regardless of your politics, investors would be wise to “follow the money”. Clearly, Wall Street is paying attention as First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) has been the top performing exchange-traded fund for the last week, 2nd best performer during the last month (only behind another government spending plan with semiconductors) and holds the number 1 spot for the last three months.
Clearly, institutions are banking on Congress opening the bank and following the money. As a result, we looked through QCLN’s holdings to find this week’s COW (chart of the week).
MP Materials Corp. (MP) is QCLN’s 16th largest holding. MP owns and operates rare earth mining and processing facilities. The company holds the mineral rights to the Mountain Pass mine and surrounding areas, as well as intellectual property rights related to the processing and development of rare earth minerals. It offers cerium, lanthanum, neodymium, praseodymium, and samarium.
MP recently broke a downtrend and got to the top side of its 50-day moving average, both moves are considered bullish on our book. The current technical profile offers a favorable reward-to-risk profile in the near term.
On the downside, MP Materials should catch solid support around $31. To the topside, the metals and mining company could find its way to the 200-day moving average of $40.59. Shares trade at $34.68 as we type. If bulls can bid MP beyond its 200-day mark, there isn’t much technical debris until $46ish.
Swing/day trading is very risky and only appropriate for investors who can afford to lose money.