USA Rare Earth Plunges 13%: Can the Canaccord Upgrade Salvage the Sinking Ship?

Summary
• Canaccord Genuity upgrades USAR price target to $23, sparking short-term rally
• Q3 earnings miss (-$0.25 vs -$0.06) triggers sharp selloff
• Roth Capital cuts target to $25, deepening investor skepticism
• Intraday range: $12.38–$14.68, with 12.9% collapse

USA Rare Earth (USAR) is in freefall, trading at $12.45 as of 18:58 ET—a 12.9% drop from its previous close. The stock’s volatile day reflects a tug-of-war between bullish analyst upgrades and bearish fundamentals. With the rare earth sector under pressure and mixed analyst sentiment, traders are scrambling to decipher whether this is a buying opportunity or a warning shot.

Canaccord Upgrade and Q3 Earnings Miss Fuel Volatility
The day’s carnage stems from a collision of conflicting signals. Canaccord Genuity’s $23 price target upgrade initially buoyed USAR, but the Q3 earnings miss (-$0.25 vs -$0.06) and Roth Capital’s $25 target cut shattered momentum. Short-covering and algorithmic trading amplified the move, but without follow-through fundamentals, the rally appears fragile. The acquisition of Less Common Metals and $400M cash runway offer long-term hope, but near-term execution risks and a -5.0 P/E ratio underscore operational challenges.

Rare Earth Sector Sinks with MP Materials Leading the Plunge
The rare earth sector is in freefall, with MP Materials (MP) down 8.48% intraday. USAR’s 13% drop mirrors the sector’s broader weakness, driven by geopolitical uncertainty and profit-taking after recent gains. While USAR’s strategic positioning (Stillwater magnet facility, government contracts) differentiates it, the sector’s synchronized decline suggests macroeconomic concerns—like China’s export policies and U.S.-China tensions—are overshadowing company-specific catalysts.

Bearish Technicals and High-Leverage Puts Signal Short-Side Opportunity
• RSI: 27.97 (oversold)
• MACD: -2.27 (bearish), Signal: -1.91
• Bollinger Bands: Price at $12.45 (near lower band at $12.01)
• 200D MA: Unavailable

Technical indicators confirm a breakdown. The RSI at 28 suggests oversold conditions, but the MACD histogram (-0.35) and Bollinger Bands signal a high-probability continuation of the downtrend. With the 52W low at $5.56 and a -5.0 P/E ratio, USAR’s near-term path is perilous. The USAR20251128P11.5 and USAR20251128P12.5 puts stand out for their high leverage (36.35% and 14.21%) and implied volatility (92.5% and 103.5%).

USAR20251128P11.5 (Put, $11.5 strike, Nov 28 expiry):
• IV: 92.5% (high volatility)
• Delta: -0.28 (moderate sensitivity)
• Theta: -0.016 (slow time decay)
• Gamma: 0.188 (responsive to price swings)
• Turnover: $260,874 (liquid)
• Leverage: 36.35% (amplifies downside)
• Payoff at 5% downside ($11.83): $0.83/share
• Ideal for capitalizing on a sharp drop below $12.00.

USAR20251128P12.5 (Put, $12.5 strike, Nov 28 expiry):
• IV: 103.5% (extreme volatility)
• Delta: -0.49 (strong sensitivity)
• Theta: -0.013 (slow decay)
• Gamma: 0.199 (high responsiveness)
• Turnover: $4,267 (liquid)
• Leverage: 14.21% (moderate amplification)
• Payoff at 5% downside ($11.83): $0.67/share
• Best for a mid- to long-term bearish bet as USAR tests support.

Aggressive short-sellers should target the $11.50 level with USAR20251128P11.5, while USAR20251128P12.5 offers a safer entry for a pullback to $12.50.

Backtest USA Rare Earth Stock Performance
I tried to retrieve historical price data for the ticker “USAR.O”, but the database returned no results, which usually means the symbol isn’t recognised (it may trade OTC, have changed ticker, or be delisted).To proceed with the −13 %-intraday-plunge event study we need a reliable daily OHLC (open–high–low–close) history covering 2022-01-01 to today. Could you please help me confirm one of the following so I can continue?1. Verify the correct trading symbol and its primary exchange (for example, is it perhaps “USAR” on the OTC market, or has it been renamed?).2. If the company is privately held or otherwise unavailable via standard market data feeds, do you have the price series in a file you can share (CSV/Excel)? 3. If neither of the above is possible, let me know whether you’d like to run the same analysis on a different, readily available ticker.Once we have valid price data, I’ll identify every day with an intraday decline of 13 % or more from the previous close, build the event set, and run the back-test to evaluate post-event performance.

USAR’s Plunge: A Buying Opportunity or a Death Spiral?
The 13% drop in USAR reflects a market at war with itself—bullish analyst upgrades clash with bearish earnings and execution risks. While the acquisition of Less Common Metals and Stillwater facility offer long-term promise, near-term technicals (oversold RSI, bearish MACD) and sector weakness (MP’s -8.48% drag) suggest the selloff isn’t over. Traders should watch the $12.00 support level and $14.68 intraday high for a potential bounce. For now, the USAR20251128P11.5 put offers a high-leverage bet on a continued decline. If the $11.50 level breaks, this contract could deliver outsized returns. Investors must also monitor the U.S. government’s rare earth policy and USAR’s Q4 operational updates for a turnaround signal.