During the "Lightning Round" segment of Mad Money Friday evening, one caller got to ask Jim Cramer about Freeport-McMoRan (FCX) : "Freeport is a pure copper play. I'd hold onto this one," Cramer replied.
Let's check out the charts of this mining giant that got a lot of press when Carl Icahn was a big buyer a number of years ago. He exited his position in August. I will not read anything into Icahn's move as the charts have remained strong.
In this daily bar chart of FCX, below, we can see that prices have soared five-fold from just below $5 to $25. Prices are trading above the rising 50-day and the bullish 200-day simple moving average lines.
The trading volume has been fairly active this year and the On-Balance-Volume (OBV) line has moved steadily higher from March telling us that buyers of FCX have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been bullish since late April but it has crossed to the downside for a take profits sell signal.
In this weekly bar chart of FCX, below, we went back five years. Prices are in a bullish alignment - in an uptrend above the rising 40-week moving average line. The weekly OBV line is bullish and so is the MACD oscillator.
We included this 10 year weekly chart of FCX, below, to show how prices have both broken a major long-term downtrend and broken out of a double bottom pattern when the highs of 2018 were broken. The height of this pattern projected upwards gives us at least a $35 price target.
In this Point and Figure chart of FCX, below, we used weekly close only price data. A target of $39 is being projected.
Bottom line strategy: If you want some exposure to copper prices without the futures market volatility you could go long FCX at current levels risking to $21. The $35-$40 area is our target.
