MP Materials (MP) is pulling back sharply today, down roughly 10% after a 42% rally in just five trading sessions.

The decline follows Tuesday’s push to a $100.25 intraday high, a round-numbered resistance level that triggered predictable profit-taking from short-term traders.

From a technical standpoint, this is a normal and healthy retracement within a broader bullish trend.

Round-numbered prices often serve as psychological resistance zones – and the more zeros in the number, the more powerful the effect.

In MP’s case, $100 marks the first major resistance level since the breakout began earlier this month. The stock’s correction now resets short-term momentum indicators like RSI and MACD, clearing the way for the next leg higher.

MP Materials Short-term Outlook
Investors should focus on the $90 level over the next two sessions.

A sustained move back above $90 would confirm that buyers are stepping back in to defend support and reload positions.

Conversely, if the stock remains below $90, traders should anticipate a test of the $80 level, which represents a 20% retracement from the recent highs. That zone aligns with intermediate support from last week’s breakout and should attract institutional buyers looking to reenter the trend.

MP Material’s Long-Term Outlook
Despite the short-term weakness, MP’s technical structure remains firmly bullish.

The stock’s 50-day and 200-day moving averages are trending higher in a strong parallel formation, confirming institutional accumulation and long-term price strength.

The 20-month moving average – a key measure of long-term momentum – also remains firmly in bullish alignment, reinforcing that MP is still in a multi-year uptrend.

Fundamentally, the stock remains backed by powerful tailwinds.

The Department of Defense’s ownership stake underscores MP’s strategic importance to U.S. national security and its central role in rebuilding America’s rare earth supply chain. The current escalation in U.S.–China trade tensions highlights why the rare earth sector – not soybeans or consumer goods – is at the heart of the new economic conflict.

Options data confirms ongoing bullish positioning.

The October and November $90 calls are seeing elevated activity as traders position for a rebound.

With the Pentagon reportedly stockpiling $1 billion in critical minerals, MP’s recent weakness is setting up as a textbook “buy-the-dip” opportunity within a broader rare earth supercycle.

Bottom Line
Shares of MP Materials remain in a long-term bull market trend. The stock holds a $150 price target over the intermediate term, assuming sustained support above $80 and a confirmed breakout through $100 resistance.

— Chris Johnson

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Source: Money Morning