AREC Hits 52-Week High Amid Bullish Momentum, Risks Remain for Long-Term Investors

Technical Analysis

American Resources Corporation (AREC) closed at $1.29 on April 17, 2025, up 16.22% from the prior session, hitting its 52-week high of $1.68 earlier in the day. The stock exhibits strong bullish momentum with an RSI of 87, signaling overbought conditions but sustained buying pressure. Volume surged to 64.86 million, substantially exceeding its average of 4.27 million, indicating heightened investor interest and liquidity. The 50-day moving average ($0.55) and 200-day moving average ($0.76) are well below the current price, confirming a strong uptrend. However, the MACD remains slightly negative (-0.01), suggesting momentum may taper in the short term. Support is established at $1.11, while no clear resistance level is present following the recent breakout.

For the next trading day (April 21, 2025), given the strong volume and price breakout, a continuation of upward movement is plausible but likely tempered by RSI-driven profit-taking or consolidation near the $1.30–$1.40 range. Over the upcoming week, the stock may exhibit volatility, potentially retesting support around $1.11 if selling pressure emerges, but the bullish trend remains intact barring a significant market-wide reversal.

Fundamental Analysis

American Resources operates in the critical minerals and rare earth sector, providing raw material solutions for infrastructure and defense. Despite the impressive stock performance, the company reports a negative trailing twelve-month EPS of -$0.25 and a negative P/E ratio of -5.16, reflecting ongoing unprofitability and early-stage growth profile. The company’s market cap stands at approximately $99.87 million, classifying it as a small-cap with higher associated risk.

Recent news highlights significant strategic developments: a novel modular mobile leaching process targeting rare earth extraction from coal and mine waste, and successful capital raises supporting expansion in refining capacity through its holding in ReElement Technologies. These innovations position American Resources to capitalize on the geopolitical pressures and critical mineral shortages exacerbated by China’s export restrictions, which could drive demand and future revenue growth.

The upcoming earnings announcement on May 20, 2025, will be a critical catalyst for reassessing operational execution and profitability trajectory.

Intrinsic Value and Long-Term Investment Potential

The company’s intrinsic value is difficult to gauge precisely due to negative earnings and ongoing investments in technology and capacity build-out. However, the proprietary leaching solution and growing rare earth refining capability represent tangible long-term competitive advantages in an increasingly strategic sector. If commercialization efforts scale successfully and market demand for rare earth elements remains robust, American Resources could transition to positive cash flow and earnings within the next 1–2 years.

Investors valuing growth potential in the critical minerals space may view the stock as a speculative long-term opportunity, contingent on production ramp-up and effective capital deployment.

Overall Evaluation: Hold

Technically, AREC demonstrates strong short-term momentum and breakout potential. Fundamentally, it remains an unprofitable small-cap with tangible growth catalysts but notable execution risks. Given the elevated RSI and recent volatility, the stock may experience pullbacks or consolidation in the near term. Long-term prospects hinge on successful implementation of its innovative extraction technology and market expansion.

The combination of high volatility, negative earnings, and speculative growth places the stock in a ‘Hold’ category: attractive for investors with a higher risk appetite seeking exposure to critical mineral innovation, yet warranting caution for those requiring stability or profitability confirmation.