Trade Opportunity Case Study of the Week: USAR Range & Base Breakout – | October 5th 2025

The Trade Opportunity

The purpose of this weekly article is to analyze the top trading opportunity of the week. To improve our identification and execution of high quality trade ideas that meet our setup requirements.

Each article will focus on a stock that meets one of three of the main categories of setups I trade:

• Range Breakout / VCP / tight area breakout
• Pullback to Support/ Key moving average
• Gapper / Post Gap Setup

These articles are like taking a step into the batting cage and loading up a historical at bat from a Ace pitcher in the world series – they will help you prepare and execute in future situations by studying important moments from the past.

The setups we cover will appear again and again in each market cycle

The market this week we pushed higher off the 10ema and broke out of the short consolidation

For this week we will be focusing on USAR which was a range and base breakout. It’s in the rare earth metals theme which is in vogue.

USAR Daily Chart:

Discovery

To catch strong moves you need to have processes in place to get names capable of them on your radar. Think of setting up a funnel system for each of your setups. Distill the characteristics you want it to exhibit and create screens that look for those.

For range breakouts my flow is

• Sort screens from lowest RMV to highest RMV and spacebar through
• Add promising stocks formign ranges up the right sides of bases to my Breakouts Watchlist
• Review daily for setups, looking for priming patterns like upside reversals and inside days.

I also want to be thinking about current and developing themes and focus on stocks that are in those. USAR is part of the rare earth metals theme along with MP.

Another reason to be focused on USAR was how it was forming the base right near all time highs.

Going through screens on Sep 30 this is what the chart looked like, with an upside reversal off the 10ema below the range pivot.

Notcie how INTC had pulled back since the gap up, and on the 23rd formed a tight day where the downside momentum slowed. This is the type of setup for a potential u turn that we are looking for.

Setup and Execution

The key pivots on the daily chart for USAR were the range highs and then the base pivot/ATH level above.

On October 1, USAR technically broke out of the range. However it was only a slight breakout. Using the AVWAP reclaim entry you had 2 opportunities giving you about 4% cushion EOD

USAR 5 Minute

The next day was the true breakout through the last early pivot and through the base pivot.

There was immediate strength off the open andthen a constructive range and AVWAP reclaim. Then came the reconfirmation and the true base breakout. The stop for the true breakout at LOD would be a bit wide but it is a volatile name so you would want to be sized a bit smaller anyway.

A 10% position (plenty in a >10% ADR% name) with a 6% stop would be risking 0.6% of the portfolio.

The next day USAR gapped up and followed through but was away from low risk areas.

Daily Chart

Future thoughts

USAR just broke out to new highs. in the very short term extended but doing nothing wrong. Would we watching the trade versus the 10ema and swing traders would have likely sold portions into strength on the breakout day and the gap up, de-risking to their trailing size. USAR is up over 30% from the range breakout.

Weekly chart:

USAR on a weekly shows how it’s trading at ATHs and just broke out. A new base or tight area would be actionable if it presents a new setup.

Homework

RGTI is another recent breakout where the slight range breakout happened close to the base pivot and the real move came the following day right off the open. Take a look at this opportunity and how you would have entered & managed risk.