Freeport McMoRan (FCX) has more than doubled from a recent low, but prices could stall a bit before renewed gains.
In this daily chart of FCX, above, we can see a strongly rising On-Balance-Volume (OBV) line since mid-January. A rising OBV line means more volume is being traded on days when FCX closes higher. Buyers try to buy on weakness, but when they buy on strength it means they have become aggressive about accumulating shares of FCX. Prices are above the now-rising 50-day moving average line, but they are still testing the declining 200-day average. The price of FCX is expected to stall or even pull back a tad, as there is a small bearish divergence between higher prices and a flat momentum line recently. On the upside, a close above $11.50 would probably kick-start further gains.
In this weekly chart of FCX, above, we can see prices testing the still declining 40-week moving average line. The OBV line on a weekly scale shows some modest improvement since early 2016. The Moving Average Convergence Divergence (MACD) oscillator signaled a cover-shorts buy signal. So bottom line, things are better, but not a big, strong base to support sustained gains. FCX is likely to make a bigger and broader base pattern in the second quarter and maybe beyond. Are you a patient long-term investor?