MP Materials Surges 9.14% on Strategic Alliances and Geopolitical Tailwinds – Is This the Start of a New Bull Run?

Summary
• MP Materials (MP) surges 9.14% intraday, trading at $69.65 amid strategic partnerships and government-backed mineral security initiatives.
• Analysts at William Blair and Deutsche Bank reaffirm bullish stances despite price target adjustments.
• Turnover hits 9.61 million shares, with the stock trading near its 52-week high of $100.25.

MP Materials is experiencing a dramatic intraday rally driven by a confluence of strategic alliances, geopolitical tailwinds, and renewed investor confidence in the rare earth sector. The stock’s 9.14% surge has pushed it closer to its 52-week high, fueled by a mix of institutional upgrades, government policy shifts, and sector-specific catalysts. With turnover exceeding 6.7% of its float, the move underscores a critical inflection point for the company’s market positioning.

Strategic Partnerships and Geopolitical Shifts Drive MP Materials' Rally
MP Materials’ explosive 9.14% gain is anchored by three key drivers: (1) a strategic partnership with the U.S. Department of Defense to build a $112-per-kilogram neodymium/praseodymium processing facility, (2) renewed focus on domestic rare earth supply chains amid U.S.-China trade tensions, and (3) Deutsche Bank’s revised $71 price target despite a 21.19% upside forecast. The stock’s surge aligns with broader sector momentum, as government-backed initiatives to reduce foreign mineral dependence create a tailwind for MP’s mine-to-magnet vertical integration model. Analysts highlight the company’s $1.9 billion cash reserves and $885 million cash flow increase as underappreciated strengths in a sector historically plagued by high processing costs and geopolitical risks.

Rare Earth Sector Gains Momentum Amid Supply Chain Reshoring
The rare earth sector is experiencing a synchronized rally, with MP Materials outperforming its peers. While the sector’s average 12-month price target is $78.91 (23.89% upside), MP’s strategic positioning as the sole U.S. integrated mine-to-magnet producer gives it a distinct edge. Recent U.S.-China trade agreements to secure rare earth supply lines and Utah’s emerging rare earth projects further validate the sector’s long-term potential. MP’s 9.14% gain contrasts with a 0.52% rise in sector leader Newmarket (NEU), underscoring its role as a bellwether for reshoring-driven growth.

Options and ETFs to Capitalize on MP Materials' Volatility
• MACD: 1.29 (bullish divergence from -0.18 signal line)
• RSI: 69.72 (approaching overbought territory)
• Bollinger Bands: Price at $69.65 (above upper band of $65.48)
• 200-day MA: $51.03 (far below current price)
• Support/Resistance: Key levels at $62.20 (intraday low) and $69.98 (intraday high)

MP Materials’ technicals suggest a continuation of its bullish momentum, with the 200-day MA acting as a strong floor and RSI indicating overbought conditions may persist. The Defiance Daily Target 2X Long MP ETF (MPL) and Leverage Shares 2X Long MP Daily ETF (MPG) offer leveraged exposure to the stock’s volatility. For options traders, two contracts stand out:

• MP20260123C65 (Call):
- Strike: $65, Expiry: 2026-01-23
- IV: 66.91% (high volatility)
- Delta: 0.7616 (moderate sensitivity)
- Theta: -0.3168 (rapid time decay)
- Gamma: 0.0400 (high sensitivity to price changes)
- Turnover: 198,256 (liquid)
- Leverage Ratio: 11.56% (moderate)
- Payoff at 5% Upside: $4.73 (max(0, 73.13 - 65))
- This call offers a balance of liquidity and gamma, ideal for a continuation of the rally.

• MP20260123C68 (Call):
- Strike: $68, Expiry: 2026-01-23
- IV: 72.04% (high volatility)
- Delta: 0.6144 (moderate sensitivity)
- Theta: -0.3205 (rapid time decay)
- Gamma: 0.0459 (high sensitivity to price changes)
- Turnover: 144,796 (liquid)
- Leverage Ratio: 16.20% (aggressive)
- Payoff at 5% Upside: $5.13 (max(0, 73.13 - 68))
- This call’s high leverage and gamma make it a top pick for aggressive bulls expecting a breakout above $69.98.

Aggressive bulls may consider MP20260123C68 into a bounce above $69.98.

Backtest MP Materials Stock Performance
The backtest of Microsoft's (MP) performance after a 9% intraday increase from 2022 to the present shows favorable short-to-medium-term gains, highlighting the stock's potential for positive movement following such events. The 3-Day win rate is 45.74%, the 10-Day win rate is 49.48%, and the 30-Day win rate is 48.23%, indicating a higher probability of positive returns within these time frames. The maximum return observed was 6.84% over 30 days, suggesting that MP can offer decent gains even after a substantial intraday surge.

MP Materials' Rally: A Strategic Buy for Reshoring-Driven Growth
MP Materials’ 9.14% surge reflects a perfect storm of strategic alliances, geopolitical tailwinds, and sector-specific catalysts. With the stock trading near its 52-week high and a 23.89% average analyst upside, the move appears sustainable as long as U.S. government support for domestic rare earth processing remains intact. Key signals to monitor include a breakdown below $62.20 (intraday low) or a breakout above $69.98 (intraday high). Investors should also watch sector leader Newmarket (NEU), which rose 0.52% today, for broader market sentiment. Aggressive bulls may consider MP20260123C68 into a bounce above $69.98.