• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Freeport-McMoRan Appears Copper-Bottomed

Let's look at the charts of this metal to see why FCX should be a good conductor of funds for investors over time.
By BRUCE KAMICH
Feb 23, 2022 | 12:46 PM EST
Stocks quotes in this article: FCX

We reviewed the charts of Freeport-McMoRan (FCX)  on Feb. 10 and wrote that "Traders who are long FCX should continue to hold those positions. Our new price target is the $58 area, up from $56. Aggressive traders could add to longs on a close above $46." Let's pay another visit to the charts and indicators.

 
The Phoenix, Arizona-based miner produced approximately 3.2 billion recoverable pounds of copper in 2020. FCX also produces gold and molybdenum, but let's check on the charts of copper futures.
 
In this weekly Japanese candlestick chart of copper futures, below, we can see that prices are close to the apex of a nine-month equilateral triangle formation. Prices have been trading around the 40-week moving average line. Notice the number of lower shadows since August telling us that traders are rejecting the lows. This is a subtle, yet bullish development. Trading volume has been diminishing through the pattern and that is typical of this kind of continuation pattern. The weekly OBV line shows us a bullish rise from February implying that buyers of copper futures have been more aggressive despite the tighter and tighter trading range. The Moving Average Convergence Divergence (MACD) oscillator has made a rounded or saucer-like turn to the upside.
 
 
In this weekly close only Point and Figure chart of copper futures, below, we used a five box reversal filter. Here the chart shows a price target of $5.47. A trade at $4.78 will refresh the uptrend.
 
 
 
 
In this daily bar chart of FCX, below, we can see that prices have made a bull flag formation since our February 10th review. Flags are short-term continuation patterns and typically continue the trend in force before the pattern unfolded. FCX is trading above the rising 50-day moving average line as well as the rising 200-day line. The On-Balance-Volume (OBV) line shows a small bump up so far in February. Maybe this is the start of a shift in direction. The MACD oscillator is just above the zero-line.
 
 
In this weekly Japanese candlestick chart of FCX, below, we see a different triangle than what the futures chart showed. Here the chart has outlined, I believe, a rising or bullish triangle - higher lows but equal highs until there is an upside breakout. Prices are above the cresting 40-week moving average line. The weekly OBV line has been rising since September and the Moving Average Convergence Divergence (MACD) oscillator is bullish. 
 
 
 
In this weekly close only Point and Figure chart of FCX, below, we can see a $61 price target. A trade at $46 should refresh the uptrend.
 
 
Bottom line strategy: Commodity prices are driven by supply and demand. Typically demand changes slowly and supply shocks like a mine closure or labor problems generate price surges to the upside. Based on my assessment of the charts (above) I would remain long shares of FCX and remain ready to add to longs on strength above $46.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Commodities | Investing | Technical Analysis | Metals & Mining

More from Investing

The Market Narrative Shifted on Tuesday, So Here's How to Shift With It

Bob Byrne
Jul 6, 2022 8:30 AM EDT

It officially changed from concern over inflation and interest rates to fear of recession, which is causing a change in where traders position themselves.

Rotation Is Easy, Building Momentum Is Difficult

James "Rev Shark" DePorre
Jul 6, 2022 8:14 AM EDT

This is a skeptical and uncertain market and it is going to take time for fear of missing out to gain traction.

Be Wary of VMware Based on Its Charts

Bruce Kamich
Jul 6, 2022 8:01 AM EDT

The technical signs are suggesting that the shares of the software provider could weaken.

Mass Confusion, Markets, Treasuries, Equities, Trading Chevron, Defense Stocks

Stephen Guilfoyle
Jul 6, 2022 7:33 AM EDT

Key to equity market volatility has been Treasury market, currency market, and commodity market volatility.

Recession-Bound Japan Aided by Weak Yen on Exports

Alex Frew McMillan
Jul 6, 2022 6:22 AM EDT

With the yen testing ¥137 and stubbornly staying above ¥135 to the U.S. dollar, Japanese exporters will benefit from a currency-exchange boon to the bottom line.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:01 PM EDT PAUL PRICE

    A Recent Director Buy in Children's Place (PLCE)

    Four of the most recent insider trades in Children...
  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login