Shares of Southern Copper Corp. (SCCO) have been going higher, as copper prices have climbed since March. The advance in copper prices has attracted some recent media attention. Let's check out the charts of copper futures and the charts of SCCO.
In this daily bar chart of the continuous copper futures, below, we can see that prices turned up from March. Prices are up fifty percent from the March low and have broken above the January highs.
In this weekly chart of the continuous copper futures, below, we went back 10 years to show this large double-bottom pattern with lows in 2016 and 2020. A weekly close over the highs of 2018 around $3.30 will be a major upside breakout. The height of this bottom formation when projected upwards from the breakout point gives us a potential price target in the $4.50 area.
In this daily bar chart of SCCO, below, we can see that the price of the stock has doubled from its March low. Prices are above the rising moving averages. The daily On-Balance-Volume (OBV) line is strong and tells us that buyers of SCCO have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been bullish since late April, but now tells us that the uptrend has lost some of its strength.
In this weekly bar chart of SCCO, below, we can see that prices have broken out over the highs of 2020 and 2019. The high of 2018 in the $55-$60 area is the next price target. Prices are above the rising 40-week moving average line. The OBV line and the MACD oscillator are both bullish.
In this Point and Figure chart of SCCO, below, we used daily price data. Here a price target in the $54 area is being projected -- a test of the 2018 high.
In this Point and Figure chart of SCCO, we used weekly close only price data with a five box reversal instead of a three box reversal. Here the chart suggests $139 as a long-term target.
Bottom line strategy: Lumber prices have been soaring. Copper prices are strong. Ignoring energy prices, are we entering an extended period of rising commodity prices? It might be too early to tell for certain, but for now copper prices are going up and the charts of SCCO are bullish. Trade SCCO from the long side risking a close below $42 for now.