MP Materials Is Down 32%. What History Says After 160 Days.

MP Materials Is Recovering After a 160-Day Slump. What History Says.

MP Materials Corp. (MP) has officially moved out of the red zone and into the yellow zone as of May 28, 2026, marking a significant shift in its technical risk profile. After spending months in high-severity territory, the stock's Drawdown Severity Score™ has improved to 4.8. This recovery follows a period where the stock fell 32.3% from its all-time high of $98.65.

Our data shows that stocks emerging from red zone severity levels often face a period of consolidation before attempting to reclaim previous peaks. When a stock like MP Materials moves from the red zone to the yellow zone, it indicates that the velocity of the sell-off has slowed enough for the Drawdown Severity Score™ to stabilize. While the stock remains 32.3% below its record high, this transition suggests the most acute phase of selling pressure may be subsiding.

The Path Out of the Red Zone

As of May 28, 2026, the current price of $66.83 represents a 163-day journey through this specific drawdown event. The Drawdown Severity Score™ of 4.8 classifies this as a "Significant" event, which is notably higher than the company's historical average max drawdown of -14.5%. This current 32.3% decline is more than double the typical pullback seen in the stock's history.

Historically, the average drawdown duration for MP Materials Corp. (MP) is 79 days. At 163 days and counting, the current event is lasting twice as long as the historical norm. This extended duration highlights the unique pressure the rare-earth sector has faced over the last six months.

We have observed similar patterns in other high-growth industrial and materials stocks. When a ticker enters the red zone, it typically stays there until a fundamental catalyst or a shift in sector sentiment provides a floor. For MP, the transition to a 4.8 severity score suggests that the market is beginning to price in a bottom, though the stock is far from the "Normal" green zone volatility levels.

Historical Comparison: The 30% Threshold

Our data indicates that MP Materials Corp. (MP) has dropped 30% or more only 3 times in its trading history. This is a relatively small sample size, but the data from these specific events provides a stark contrast to the stock's usual behavior. While the average drawdown for the stock is 79 days, these deeper 30%+ corrections have an average duration of 528 days.

This discrepancy is vital for risk management. While the stock is showing signs of life by moving into the yellow zone, history suggests that recoveries from this depth are marathons, not sprints. The 528-day average for comparable drops indicates that even after the initial severity improves, the "time under water" can persist for over a year.

We must note that with only 3 comparable events, the statistical significance is lower than it would be for a more mature stock with decades of data. However, the fact that MP has only reached this level of drawdown three times in 24 total historical drawdown events confirms that the current 32.3% decline is an outlier.

Catalysts and Market Context

The move from the red zone to the yellow zone coincides with several news developments affecting the company. According to Yahoo Finance, MP Materials Corp. (MP) recently reported Q1 earnings and revenues that topped analyst estimates. This fundamental strength may be providing the support necessary to stabilize the Drawdown Severity Score™.

Additionally, legal and geopolitical factors are influencing investor sentiment. Mining.com reported that MP Materials has accused USA Rare Earth of stealing magnet technology. This litigation comes at a time when the market is closely watching the competitive landscape for domestic rare-earth production.

The broader sector is also reacting to international relations. According to Quiver Quantitative, investors are weighing opinions on the US-China summit and how it might impact rare earth dynamics. As a critical supplier in the Western supply chain, MP is highly sensitive to these shifts, which explains the 163-day duration of the current drawdown.

Analyzing the Remaining Distance

Despite the improvement in the Drawdown Severity Score™, the stock still has a significant climb to reach its former levels. To return to its all-time high of $98.65 from the May 28, 2026 price of $66.83, the stock would need to gain approximately 47.6%.

Our data shows that the transition from the yellow zone back to the green zone (where the Drawdown Severity Score™ typically sits below 3.0) requires more than just a lack of selling. It requires sustained upward momentum. In the 24 historical drawdown events we have tracked for MP, the stock has shown a tendency to recover quickly from small dips but struggle when the drawdown exceeds the 20% mark.

Investors often look at the 30% drawdown mark as a psychological level. Having breached that and now sitting at -32.3%, MP is in a phase where historical precedents suggest a longer recovery window. We will continue to monitor the Drawdown Severity Score™ to see if the stock can maintain its position in the yellow zone or if it risks a return to red zone territory.