Freeport-McMoRan (FCX) has been scorching bears in 2016 after a disastrous 2015, but is the run over or only midway to completion? Well, it depends -- which, by the way, is the answer to almost every question of this sort.
It depends on your time frame and it depends on what the stock does here next. FCX was a tough buy near the start of the year. There was no technical reason to buy the thing until early February, and even that was only reserved for folks who look for oversold bullish crosses in technical indicators such as the ones on the weekly chart.
I have a close friend, a very good trader (@craigscott31 on Twitter), who nailed this turn based on his use of instinct and common sense. Not many folks can trade on instinct and just a flat read, but Craig does it better than anyone I've ever met. For the rest of us, we are left wrestling with technicals or fundamentals. In this case, I'm simply taking a flying pass at the technicals here because we do appear to be getting some potential setups ready to trigger.
This is one of those instances where the daily chart and the weekly chart don't appear to agree going forward. It's a technician's version of Civil War.
FCX bulls have lost a strong uptrend line dating back to the lows in January. We tested it several times, but it held strong and made for a great buy every time it looked ready to break down. Now we are fighting with $11 here and the stock shows risk to $9 should it fail to hold.
We do have a breakdown in the StochRSI here under .50 along with a bearish divergence in the Full Stochastics and a bearish cross in the moving average convergence divergence (MACD). This still feels like one where you need to commit to it on any whoosh lower as the bounces have been quick. Still, the low-level bullish crosses in the Full Stochastics have worked -- see early April and mid-January for examples. It's still a name I like, but one I like a little less now.
I'll be pestering Craig as well to let me know when he sells. You can't ever go wrong with a second opinion from another style of trade. It is one thing experienced traders learn. Yours may be the only opinion you have, but others may have insight you don't know, so use it to help test your thesis/opinion.
If we scale back to a weekly view, $14 becomes a huge number. Yes, we still have the support at $11 to worry about and a target of $9 if $11 should fail, but a massive inverse head and shoulders would trigger on a weekly close over $14. While we get a target of $24, I would put $18 to $20 as a more realistic target here. We do have a few yellow flags with the drop in the StochRSI and Full Stochastics, but as long as FCX holds $11, I can't see a long-term reason to sell. Indeed, I likely would put my stop around $10 or even $9.75, if my view extended beyond the next two weeks.
Take your side -- short-term scalp or longer-term swing here. It's a Civil War in FCX charts. One last note is not to sleep on copper. If that fall continues, it will likely drag down FCX strong charts, support or otherwise.