Molycorp could start a technical downward trend after the V-bottom in recent sessions.

From a technical viewpoint, the proximity of the USD 11.6 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

Therefore, the most offensive investor can benefit from the technical configuration to take a short position. The objective will be fixed near to the USD 8.6 support. Only the breakdown of this level would open up new bearish targets toward USD 6.1. The stop loss will be set above USD 11.6.