Critical Metals Soars 33%—What’s Fueling the Surge?

• Critical Metals (CRML) spikes 33% to $3.965, hitting an intraday high of $4.14.
• Launches 2,000m drilling campaign at Greenland’s Tanbreez Rare Earth Project.
• MP Materials (MP) surges 22.8% as rare earth sector gains momentum amid U.S. trade policies.
• Sector peers like Freeport-McMoRan (FCX) and VanEck Rare Earth ETF (REMX) rally on geopolitical tailwinds.

Critical Metals’ shares skyrocketed on news of an aggressive drilling program targeting rare earth expansion, aligning with U.S. strategic mineral demands. The stock’s 33% surge marks its best day since 2021, outperforming a sector rallying on trade war dynamics and EV supply chain concerns.

Drilling Program Launch Ignites Rare Earth Optimism
The 33% surge stems directly from Critical Metals’ announcement of a 2,000m diamond drilling campaign at its Tanbreez Rare Earth Project in Greenland. The program aims to expand the existing 22.56Mt mineral resource estimate, with initial core samples showing 30-40% eudialyte mineralization—a key rare earth host rock. CEO Tony Sage emphasized the project’s alignment with Western demand for critical minerals, particularly as the U.S. and Europe seek alternatives to Chinese dominance in rare earth supply chains. With commercial production targeted for 2026 and a Q4 2025 feasibility study deadline, the drilling campaign’s success could validate the project’s viability, driving sustained investor confidence.

Rare Earth Sector Heats Up as MP Materials Leads the Charge
Critical Metals’ move mirrors broader momentum in the rare earth and critical minerals sector. MP Materials (MP), the U.S.’s sole rare earth miner, rose 22.8% today on Apple’s $500M supply deal and Pentagon investment, highlighting geopolitical tailwinds. The VanEck Rare Earth ETF (REMX) climbed 1.8%, while Freeport-McMoRan (FCX) advanced 2.1% on copper tariffs. Critical Metals’ 33% jump outpaces sector peers, but its direct exposure to Greenland’s Tanbreez—a potential Western supermine—positions it as a high-beta play on critical mineral scarcity.

Bullish Technicals and Leveraged Options Highlight Rare Earth Play
Technical Indicators:
• MACD: 0.306 vs Signal Line 0.368 (bullish divergence forming)
• RSI: 57.07 (neutral, below overbought 70)
• Bollinger Bands: Current price ($3.965) exceeds upper band ($3.877) – a bullish breakout signal
• 30D MA: $2.45 vs 200D MA: $4.39 (short-term momentum dominates)

Trading Setup:
Critical Metals’ breach of Bollinger upper bands suggests a near-term bullish bias. Bulls aim to hold $3.80 (50% retrace of $3.1–$4.14) with resistance at $4.20. A close above $4.00 could trigger a rally toward 52W high $10.41. For aggressive plays, the CRML20260220C5 call option offers leverage: strike price $5.00, implied volatility 142%, and turnover $58,378. This contract’s 302.86% price change vs underlying and theta decay (-0.0039) makes it ideal for a 3–6 month hold into production milestones.

Potential Payoff: In a 5% price jump to $4.16, this call’s payoff remains $0 (out-of-the-money), but its high IV and gamma (0.085) amplify gains if the stock breaches $5.00.

Hook: Bulls may layer positions in CRML20260220C5 if $4.00 holds, targeting $5.00 by Q4 2025 feasibility updates.

Backtest Critical Metals Stock Performance
The backtest of CRML's performance after a 33% intraday surge shows mixed results. While the 3-day win rate is high at 39.72%, the 10-day win rate is slightly lower at 46.81%, and the 30-day win rate is the lowest at 36.17%. The maximum return during the backtest period was 1.64%, which occurred on day 46, indicating that while there is potential for gains, the strategy may not always lead to significant long-term returns.

Critical Metals’ Rare Earth Play Holds Long-Term Potential—Bullish Momentum Ahead?
Critical Metals’ 33% surge underscores investor enthusiasm for its Greenland rare earth project, but sustainability hinges on drilling results and regulatory approvals. With MP Materials leading sector gains (22.8%) and U.S. trade policies favoring domestic supply, CRML’s position as a Western rare earth supplier could amplify its valuation. Watch for Q4 feasibility outcomes and production timelines—misses could reverse momentum. For now, bulls remain in control: hold $3.80 or risk a correction to 200D MA $4.39. Aggressive traders: layer CRML20260220C5 calls into $4.00 resistance, but brace for volatility as geopolitical risks loom.