Chart Advisor: The Rare Earth Reckoning

By Todd Stankiewicz CMT, CFP, ChFC

1/ URA’s Rally Stalls

2/ Healthcare’s Hidden Rotation

3/ Healthcare (XLV) – Patience Required

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1/

URA’s Rally Stalls

The Global X Uranium ETF (URA) is flashing warning signs after a remarkable run throughout 2025, with technical indicators suggesting a potential pullback to key support levels.

URA trades at $50.21, down 17% from its October 13th high of $60.50. The weekly chart reveals classic signs of exhaustion that demand attention from technical traders.

Critical Technical Levels to Watch:

• $60.50 – Recent high; strong resistance after rejection
• $50.21 – Current price; decision point
• $47.15 – Last week’s low; YOUR LINE IN THE SAND
• $43.35 – Middle Bollinger Band; primary downside target (14% lower)
• $40.00 – August/September consolidation zone
• $37-38 – Major support from June/July period

The RSI sits at 71, still elevated after touching 80+ during the peak. This means selling pressure hasn’t exhausted itself, there’s plenty of room to fall toward 50 or lower. Price recently broke below the upper Bollinger Band after rejection, triggering a textbook mean reversion setup. The bands are now compressing after extreme expansion, with price gravitating toward that middle band at $43.35.

Watch $47.15 closely. Hold this level and URA could bounce back toward $52. Break below it, and the probability jumps to 60-70% that we test the $43.35 middle Bollinger Band target. The technical setup strongly favors continued weakness until conditions reset.

URA isn’t alone. The entire commodity complex is under pressure – gold down 8.8%, broad commodities weakening – while the S&P 500 makes new highs. This risk-on rotation out of commodities creates significant headwinds for uranium.

Bottom Line: For traders holding URA after this extended run, position sizing and stop-loss discipline are paramount. With RSI still elevated, Bollinger Bands compressing, and $47.15 as the critical support, the path of least resistance appears lower until technical conditions reset.

2/

Healthcare’s Hidden Rotation

Relative Rotation Graphs (RRG) continue to serve as a powerful visualization tool for identifying potential sector leadership changes, and the current weekly RRG of S&P 500 sectors reveals an intriguing rotation underway. While it may be difficult to detect at first glance, traditional market leaders including Consumer Discretionary, Communication Services, and Information Technology appear to be rolling over from their dominant positions.

What makes this rotation particularly noteworthy is the movement of defensive and previously underperforming sectors. Utilities, Healthcare, Real Estate, and Energy are transitioning from the improving quadrant toward leading status. In RRG methodology, sectors typically rotate clockwise through four quadrants – leading, weakening, lagging, and improving – with distance from the center indicating the velocity of that rotation.

Among these emerging leaders, Healthcare (represented by the ETF XLV) stands out as potentially the most compelling opportunity. Healthcare has demonstrated resilience, with the sector posting gains even amid broader market volatility, yet it has been consistently underestimated by investors due to its prolonged period of underperformance relative to growth-oriented sectors.

The sector’s current positioning suggests it may be building momentum at a critical inflection point. Healthcare providers and pharmaceuticals/biotechnology subsectors remain undervalued versus their 11-year averages, presenting a potential value opportunity as the sector rotates into a leadership position. Additionally, the integration of AI-driven solutions in healthcare is creating operational efficiencies and driving innovation, providing fundamental support for the technical rotation signal.

For investors monitoring sector rotation strategies, Healthcare warrants close attention. The combination of improving relative strength, undervaluation, and technological tailwinds could position XLV and related healthcare equities as unexpected leaders in the coming months, a development that many market participants may be overlooking.

3/

The Rare Earth Reckoning

Rare earth minerals have exploded into the spotlight as U.S.-China trade tensions reach a boiling point, but the technical picture for REMX (VanEck Rare Earth and Strategic Metals ETF) is flashing warning signals that traders can’t afford to ignore.

REMX has delivered a stunning +81% surge from May’s $38.95 low to October’s $81.71 peak, fueled by the Trump administration’s $8.5 billion Australia critical minerals partnership signed October 20th and China’s rare earth export restrictions announced earlier this month. But parabolic moves rarely end well.

Currently trading at $70.21, REMX sits in dangerous territory. The RSI has spiked to 75-77, deep into overbought conditions. Bollinger Band Width has exploded to multi-year highs near 40-42, signaling extreme volatility and probable mean reversion ahead.

The primary pullback target? The middle Bollinger Band at $59.27, representing a potential 15% correction. Break that level, and a catastrophic air gap opens down to $36.74, a potential 48% plunge from current levels.

Here’s the critical question every REMX holder must answer: Are you comfortable with your position size if we hit that $36-$59 zone?’

The $43-$50 breakout zone remains the line in the sand for long-term bulls. Hold above it, and the structural story stays intact. Lose it, and the entire rally unravels.

Technical analysis isn’t about predicting profits, it’s about managing risk effectively. With REMX stretched to extremes, position sizing and stop-loss discipline aren’t optional.

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Originally posted 28th October 2025