MTM Critical Minerals Chart Analysis: Momentum Trading Patterns and Psychology Insights
- Anita Arnold
- Sep 19, 2025
- 5 min read
The psychological challenge of momentum trading becomes crystal clear when you witness a stock like MTM Critical Minerals complete a 1,000% move from 3 cents to 30 cents. "Most people are afraid to buy new highs," Gary Glover observes, "but we know that when stronger stocks break into new highs, that's a strong sign."
This comprehensive analysis of MTM Critical Minerals reveals the systematic approach successful momentum traders use to identify, enter, and manage market-leading stocks. You'll discover the technical patterns that signal genuine momentum, the volume characteristics that separate leaders from laggards, and the psychological framework required to hold winning positions.
Through this Model Book study, we examine how MTM demonstrated classic momentum leadership qualities and what these patterns teach us about systematic trading approaches.
Understanding MTM's Market Context
MTM Critical Minerals operates in the critical minerals space with a unique approach—they focus on recovering and recycling metals rather than traditional mining. Using flash joule heating technology, they extract antimony, gallium, germanium, indium, gold, and other rare earth elements from high-grade waste streams.
The company's momentum surge began following China's December 3, 2024 announcement of an immediate halt to exports of gallium, germanium, and antimony to the US. Interestingly, MTM's price action began two days before this announcement, demonstrating how systematic monitoring can identify early momentum signals.
This video demonstrates these concepts through live chart analysis, showing how the patterns discussed apply to real market conditions:
Classic Momentum Pattern Recognition
The Show of Strength and Consolidation Sequence
MTM exhibited the textbook momentum progression that systematic traders seek:
Initial Breakout Phase: The stock moved from 3 cents to approximately 10 cents, representing the initial "show of strength" that alerts momentum scanners to potential leadership.
Consolidation Period: Following the initial move, MTM consolidated for approximately three and a half months—a timeframe Gary notes is "not uncommon" and actually "more normal" than shorter consolidations. This patient base-building phase is crucial for sustainable momentum moves.
Secondary Launch: The subsequent breakout to new highs demonstrated the stock's ability to attract fresh buying interest, a key characteristic of genuine market leaders.
Volume Analysis: The Foundation of Momentum
Volume patterns throughout MTM's advance revealed classic momentum characteristics:
Strong volume on advances: Each upward drive showed increased participation
Light volume on pullbacks: Consolidation periods exhibited reduced selling pressure
Breakout confirmation: Major moves higher occurred on expanded volume, confirming institutional interest
"We just get that classic pattern," Gary explains. "Big volume rallies, pulled back on light volume, big volume rallies, then pulled back on light volume all the way through."
Moving Average Support and Resistance
MTM's adherence to moving average support provided systematic entry and exit signals:
20-Day Moving Average: The stock consistently held above its 20-day moving average during the primary uptrend, offering a systematic approach to position management.
10-Day Moving Average: While brief violations occurred, the faster 10-day average served as a guide for the most aggressive momentum phases.
Gary notes an interesting observation: "Each stock has got maybe two angles that it likes to run. Once you work out what those angles are, it'll continue following one of those two paths."
Position Sizing and Risk Management Psychology
The Concentration Versus Diversification Balance
Momentum trading requires larger position sizes than traditional portfolio management, but with strict risk controls:
Position Sizing Framework:
Traditional portfolios: 4-5% per position
Momentum approach: 15-25% positions in highest-conviction leaders
Gary's personal preference: 15% maximum, with flexibility for exceptional opportunities
Scaling Strategy:
Initial entry: 5-10% position size
Add on strength: Additional 5% increments
Exit in thirds: Remove positions in 5% increments as profit targets are reached
Emotional Discipline and Systematic Exits
"The key there is to take all the emotion out of it, have a plan to do it," Gary emphasises. The discussion reveals how successful momentum traders avoid the psychological trap of negotiating with positions after entry.
Hard Stop Philosophy: Gary uses predetermined stop levels to eliminate emotional decision-making: "I don't want to be negotiating with myself a couple days after I've entered because I think it might bounce."
Remember that past performance is no guarantee of future results, and all trading involves risk. The systematic approach discussed focuses on educational frameworks rather than specific trade recommendations.
Advanced Pattern Recognition
Cup and Handle Formation
MTM displayed what Gary describes as "a beautiful cup and handle" formation during its consolidation phase. This pattern represents:
Cup formation: The extended base-building period
Handle development: The final consolidation before breakout
Volume confirmation: Increased participation on the handle breakout
VCP (Volatility Contraction Pattern) Elements
Multiple VCP formations appeared throughout MTM's advance, each representing potential entry points for momentum traders:
Tightening price action: Progressive narrowing of trading ranges
Volume characteristics: Reduced volatility during contraction phases
Breakout confirmation: Expansion beyond prior resistance levels
Elliott Wave Considerations
The final phase of MTM's advance exhibited what Gary identifies as potential "fifth wave" characteristics, suggesting caution for new entries:
"This does look like a fifth wave. Not saying it's all over here, but in terms of Elliott wave rules, that's warning us that this could be the last drive before we go through a bit of consolidation."
Systematic Study Approach
Model Book Methodology
Gary's recommendation for developing momentum trading skills centres on systematic study:
Study Framework:
Identify the 5-6 biggest market leaders annually
Apply your systematic approach retrospectively
Evaluate entry points, position sizing, and exit strategies
Test consistency across multiple examples
"The whole idea is that it shouldn't keep you in for the very longest on one chart. It should be a timeless principle that should get a healthy chunk of the majority of big rallies for the best market leaders in each market cycle."
Customisation and Individual Adaptation
While systematic principles remain consistent, individual adaptation is essential:
"You've got to customise it to you," Gary explains. "The main thing is just not to make dramatic changes. You just want to be making small minor changes."
The discussion emphasises how each trader must develop comfort with their specific approach while maintaining adherence to proven momentum principles.
Continue Your Momentum Trading Education
The concepts covered here form the foundation of successful momentum trading psychology and pattern recognition. FMP YouTube members access comprehensive educational resources through our weekly 3030 Report, featuring:
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Key Takeaways
MTM Critical Minerals demonstrates how systematic momentum analysis can identify potential market leaders before they become obvious to the broader market. The combination of technical pattern recognition, volume analysis, and disciplined position management creates a framework for approaching momentum opportunities.
The psychological aspects discussed—from the fear of buying new highs to the discipline required for systematic exits—highlight why successful momentum trading depends as much on mental framework as technical analysis. As Gary emphasises, the key lies in developing a systematic approach that can be applied consistently across multiple market cycles.
For Australian traders, understanding these momentum principles provides educational insight into how market leadership develops and how systematic approaches can help build confidence in decision-making processes.
Continue developing your understanding of momentum trading concepts through our related educational content on VCP pattern recognition, volume analysis techniques, and position sizing psychology.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. Past performance is no guarantee of future results. Consider your financial situation and seek professional advice before making investment decisions.
Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. Consider your objectives, financial situation and needs before acting. Seek appropriate professional advice. We accept no liability for any loss or damages arising from use.
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