I have been carefully scouring the resource markets for exceptional opportunities over the past few months and indicated numerous times about the potential rebound and breakout in uranium, graphite, PGM’s and rare earth mining stocks. At the end of October, I said to watch for a rebound in uranium as major volume accumulated shares of Uranium Participation Corp which has now just broken out into new nine month highs and made a bullish golden crossover of the 50 and 200 day moving average.
I also told you about increased M&A in the rare earths and graphite sector. Now Molycorp has just broken out on huge volume as even this giant could be a takeout target of Molymet as it trades below book value.
In addition, I highlighted a few months ago to buy NYSE graphite bellwether Graftech and some of the high quality graphite miners. I wrote in this article published back in November about getting ready for a rebound in graphite, “I recently highlighted Graftech (GTI) in early October and believed the stock was about to make a major move as it was trading below book value. At that time, Graftech’s market cap was below its revenue which signaled an excellent value play. Since that time Graftech has soared over 40% while the S&P500 has gained under 7%…Some of the more advanced junior graphite miners which may benefit from this upturn is Flinders Resources (OTCPK:FLNXF), Focus Graphite (OTCQX:FCSMF) and Northern Graphite (OTCQX:NGPHF).”
All these graphite stocks mentioned above have been breaking out on major volume this week as predicted. The catalyst may have been the Chinese off take announced with Focus Graphite on its Quebec Lac Knife Deposit. This is the first major off-take agreement in the graphite sector and it comes from China the largest exporter of graphite. This indicates to the markets what I have been saying for years that China is looking to import graphite over the longer term and Western graphite assets are in demand.