Fellow Investors,
USA Graphite (USGT) showed resilience in the face of profit-taking Monday after a strong rally last week. Shares continued to be supported by buyers looking to pick up some cheap stock with most of today's trading talking place in the $0.71-$0.72 range. Now is a great time to get some USGT shares on the cheap before the next leg of the rally.
The move in USGT began around $0.40 and the shares rallied to a high of $0.965 on January 8. Sustained buying interest brought the shares back from a massive short attack that briefly drove the price back down to $0.39 before last week's rally pushed the price back up to near $0.90.
USGT is following its typical trading pattern on the daily chart—weaker early in the week and stronger towards the end of the week. Buying interest remains strong as investors assess management's graphite property acquisition plans positively.
USGT is heading higher and should recover the $0.90 level quickly and even hit new highs above $1.00 shortly. Investors should take advantage of today's lower prices to get some cheap shares on board now.
USGS data shows demand for graphite increasing dramatically. U.S. graphite consumption is closely tied to overall economic activity. After hitting a post-financial crisis low of 22,000 metric tons in 2009, U.S. consumption nearly tripled to an estimated 63,000 metric tons in 2011 and is thought to rising even further today.
Graphite prices are rising sharply in line with increased demand. The USGS report also showed that the price of natural flake graphite is rising much faster than other forms of graphite. In 2007, flake graphite averaged $499 per ton. In 2011, the average price was $1,170 per ton.
Consider that, right now, the United States mines none of its own graphite. That means that we are sending a lot of our hard-earned money to overseas suppliers—particularly China, which provides more than half of all of the graphite imported by the U.S. Mexico and Canada, America's other major graphite suppliers, are friends of ours but China does not have America's best interests at heart.
Now you can see why USGT's success is so important to the future of America's high-tech industry. Natural flake graphite, the raw material for graphene, the building block of the 21st century, is an important strategic mineral. USGT management plans to become the dominant American supplier of natural flake graphite.
Happy Trading!
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