Wednesday, October 20, 2010

New Rare Earth pick found - AREM.OB

Guys, I think REE is topping out. Looking at MCP's price action today, I think REE is going to pull back in the coming sessions. I would ring the register here and wait for a pull back, probably around $10.50 or $11. REE claimed that it had huge deposits of REEs in the lands that it owns but it is going to take a few years to extract and commercialize them. Fresh long positions are not advised since it went up too fast and too furious and hence there is a possibility of dilution for financing reasons, which might bring the stock price down. I would be surprised if the insiders do not take advantage of this spike in the price.

Bottomline - In the long term, REE is going to be one of our most incredible picks but buy it on a pullback and do not take fresh long positions at the current levels. Follow the trend because it is always your friend!

Here is my new Rare Earth pick, American Rare Earths and Materials Corp (AREM.OB). Not many people knew about this OTC stock yet. Here is some background about this company. AREM engages in the extraction, production, and commercialization of rare earth metals in Canada. The company focuses on the distribution of rare earth metals, including scandium, neodymium, europium, and lithium that are used in transportation, shipbuilding, power transmission, automotive, aerospace, alternative energy, and selected consumer markets. It also develops advanced chemicals and materials, such as phosphates. The company was formerly known as Element 21 Golf Company and changed its name to American Rare Earths and Materials, Corp. in June 2010. American Rare Earths and Materials, Corp. was founded in 2002 and is based in Toronto, Canada.

My opinion - AREM is not explored by many momentum traders and/or day traders yet. It is always smart to stay ahead of the game. AREM closed at .38 today with around a million shares traded, which is about 30 times above its 3 month average volume. It has got a tiny tiny market cap of $8 Million. Good thing about this stock is it is not on pinksheets but on OTCBB, which is hard to find in this market. It's hard to find an OTC stock that is in a red hot sector trading at .38/share.

Is this company legit? I do not have an answer for that question yet but reading their recent PRs and company website it looks like the management is doing their best to increase their share holder value. I am going to call the company tomorrow and find out more details about the reserves they have and their future plans (Not sure if they are going to disclose :) but will try). If I were the CEO of that company, I would take advantage of the current market situation and release some facts about mining, reserves, new agreements etc, which would drive the stock price to $3! LOL how sweet was that?

Here is the contact number, 416-362-2121 if you would like to try. It's a small company so you might even want to try to talk to the CEO directly!

According to Dr. Hearn, CEO, "We will soon be announcing a series of strategic Rare Earth metals partnerships in North America that will help the U.S. get closer to achieving its goal of self-reliance in this critical mineral category."

Read the entire story here

I bought AERM at .38 today and might add more if it pulls back tomorrow since I strongly believe that this sector has more legs to run until Chinese come back and say Hey we have opened the gates! but that's costly thing for them to do.

A general Caution and Advise -As I always advise in my posts, Do not chase stocks. please keep in mind that I am not a Stock Market Analyst or an Investment Adviser to count on my recommendations/alerts. As always please do your DD before investing or speculating, start with a small position, always keep your stop losses in place and emotions out. Finally thank me for your profits but do not blame me for your losses because you are the one who pulled the trigger!!!

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Who is Mr.Incredible?

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Mr.Incredible is a Momentum/Technical Breakout player who trades small/micro cap plays and who saw a 600% Growth since 2006, Yes even in this down market. I am going to post my real trades (including profits/losses) soon...As a general caution and advice Please start with a small position and always keep your stop losses in place just in case....As usual Do your DD before investing. Thank me for your profits and don't blame me for your losses because you are the one who pulled the trigger!!!