MP Materials Plummets 9.4% Amid Geopolitical Uncertainty and Sector Volatility – What’s Next for the Rare Earth Giant?

Summary
• MP Materials (MP) plunges 9.38% to $89.40, erasing $9.25 from its intraday high of $97.00
• Intraday volume surges to 25.4 million shares, 19.58% of its float
• Recent $500M Apple partnership and $400M DoD investment now under scrutiny
• RSI hits 74.92 (overbought), MACD at 5.08, and Bollinger Bands signal extreme volatility

MP Materials, the rare earths leader, faces a dramatic intraday selloff as geopolitical tensions and sector-wide jitters collide. With a 9.38% drop from its 52-week high of $100.25, the stock’s sharp correction raises urgent questions about the sustainability of its recent rally. The move follows a flurry of high-profile partnerships, including a $500M deal with Apple and a $400M DoD investment, yet today’s volatility suggests market skepticism. Traders are now parsing technical indicators and options activity to gauge whether this is a short-term correction or a deeper shift in sentiment.

Geopolitical Tensions and Sector-Wide Jitters Trigger Sharp Selloff
MP Materials’ 9.38% intraday drop is driven by a confluence of geopolitical uncertainty and sector-specific risks. Recent news of China’s potential rare earth export restrictions and U.S.-China trade tensions have reignited fears of supply chain disruptions. Despite landmark partnerships with the DoD and Apple, the market is now questioning the sustainability of MP’s valuation, which trades at a 50x forward revenue multiple. The stock’s sharp decline aligns with broader sector weakness, as rare earths face headwinds from regulatory shifts and cyclical demand concerns. Additionally, the Trump administration’s aggressive rhetoric on retaliatory tariffs has amplified volatility, causing investors to reassess the geopolitical premium embedded in MP’s price.

Options and Technicals Signal High-Risk, High-Reward Setup
• 200-day average: $39.21 (far below current price)
• RSI: 74.92 (overbought, suggesting potential reversal)
• MACD: 5.08 (bullish divergence with price drop)
• Bollinger Bands: Price at 90.97 (upper band) vs. 57.57 (lower band), indicating extreme volatility
• K-line pattern: Short-term bullish trend, long-term bullish

MP Materials’ technicals present a mixed picture. While the RSI suggests overbought conditions and a potential pullback, the MACD and K-line pattern hint at lingering bullish momentum. Key support levels at $86.50 (intraday low) and $74.27 (middle Bollinger Band) are critical for near-term stability. The stock’s 19.58% turnover rate and high implied volatility (120.91% for October 24 options) underscore intense short-term trading activity.

Top Options Picks:
• MP20251024P89 (Put Option):
- Strike Price: $89
- Expiration: 2025-10-24
- IV: 125.64% (high volatility)
- Leverage Ratio: 12.82% (moderate)
- Delta: -0.4414 (moderate sensitivity)
- Theta: -0.1803 (rapid time decay)
- Gamma: 0.0212 (high sensitivity to price changes)
- Turnover: 58,084 (liquid)
- Payoff (5% downside): $4.45 per contract
- Why it stands out: This put option offers aggressive downside protection with high gamma and theta, ideal for capitalizing on a potential break below $89.

• MP20251024C90 (Call Option):
- Strike Price: $90
- Expiration: 2025-10-24
- IV: 119.86% (reasonable)
- Leverage Ratio: 12.82% (moderate)
- Delta: 0.5352 (moderate sensitivity)
- Theta: -0.5189 (aggressive time decay)
- Gamma: 0.0223 (high sensitivity)
- Turnover: 1,008,774 (extremely liquid)
- Payoff (5% downside): $0.55 per contract
- Why it stands out: This call option balances liquidity and leverage, offering a hedge against a rebound above $90 despite its high theta decay.

Trading Setup: Aggressive short-term traders should focus on the $86.50 support level. A break below this could trigger a test of the $74.27 middle Bollinger Band. For a bullish bounce, watch the $90.00 level. Given the high IV and liquidity, options like MP20251024P89 and MP20251024C90 are optimal for directional bets.

Backtest MP Materials Stock Performance
Below is the interactive event-backtest report I prepared for the –9 % intraday-plunge pattern in MP Materials (MP.N) from 2022-01-01 through 2025-10-15. Key take-aways first, then you can explore the full statistics in the module.Key findings• Sample size: 23 qualifying plunge events. • Near-term pressure: average next-day return –0.7 %, two-day –0.4 % (not statistically significant). • Mean-reversion strength builds from day 4 onward; by day 30 the cumulative event return reaches +18.1 %, with significance first appearing on day 27. • Win-rate improves from 35 % (day 1) to 59 % (day 30). • Benchmark (buy-and-hold) over the same windows delivered only +4.7 %. • Conclusion: Historically, MP tends to rebound over the subsequent month after a sharp 9 % intraday drawdown, but the edge becomes material only after ~4 weeks and volatility is high (drawdowns inside the window can exceed 10 %).Auto-chosen settings explained• Event definition: any trading day whose intraday low ≤ –9 % of the previous close. • Holding-period window: ±0 → +30 trading days (default for this template when the user doesn’t specify). • Price series: close prices, unadjusted. Next steps: You can adjust the threshold (e.g., –7 % or –10 %), change the holding window, or overlay risk-control rules if you’re considering a trading strategy.Open the canvas on the right to explore the detailed return curve, win-rate chart and P-value table.Let me know if you’d like to drill down further, test additional thresholds, or convert these observations into a tradeable strategy.

MP Materials at a Crossroads: Geopolitical Risks vs. Strategic Partnerships
MP Materials’ 9.38% selloff underscores the fragility of its geopolitical premium valuation. While the DoD and Apple partnerships remain foundational, today’s volatility highlights the sector’s exposure to trade tensions and regulatory shifts. Traders should monitor the $86.50 support level and the $90.00 resistance for directional clues. The sector leader, Newmarket (NEU), with a 0.38% intraday gain, offers a benchmark for broader rare earths sentiment. Action Insight: Position for a short-term rebound above $90.00 or a breakdown below $86.50, using the selected options to capitalize on high volatility. Watch for follow-up news on U.S.-China trade talks and MP’s production timelines for Apple.