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By Barrie Einarson

In today’s edition of What Makes This Trade Great — or maybe more accurately, What Makes This Trade Interesting — I want to take a closer look at USAR. To Subscribe to Trade Ideas: Barrie Einarson | Trade ideas
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Let’s start with the daily chart.

USAR was flooded with bullish headlines after news broke that the U.S. government is investing $1.6 billion into the company. On the surface, that kind of announcement sounds like a no-brainer catalyst for higher prices. And initially, the market reacted just like you’d expect.

The stock pushed as high as $3.21 yesterday.

But then something important happened.

Instead of holding those gains, USAR sold off steadily throughout the entire session, eventually closing down near $2.68. Even more telling, early this morning the stock dipped as low as $2.48 before bouncing back to around $2.59.

So what’s the takeaway here?

This is a perfect example of why traders need to stay grounded in price action, not headlines. Even with objectively “good” news, the market can — and often does — react in unexpected ways. If buyers don’t step in with conviction, profits get taken, enthusiasm fades, and price tells the real story.

That said, USAR isn’t necessarily done.

If the stock can continue to hold in this general area, there’s a possibility we see another move higher. Consolidation after a big news event can sometimes lead to a second opportunity — but it has to prove itself.

The key lesson here is simple:
You just never know how the market will react.
That’s why we let the chart do the talking.

Stay patient, stay objective, and always respect what price is telling you.