On November 2 I reviewed the charts of Freeport-McMoRan (FCX) and wrote that "Traders who went long FCX should continue to hold but they can raise their sell stop to $26 from $25. A trade at $33.93 or higher should get the chart moving to the upside again.
On Tuesday a sell-side firm raised their fundamental opinion of Southern Copper Corp ( SCCO) to overweight (buy) with a $54 price target. Let's check out the charts of copper futures and SCCO.
In this daily bar chart of copper futures (continuous contract) we can see that prices have rallied above the 50-day moving average line. The trading volume has been increasing the past two months. The daily On-Balance-Volume (OBV) line is still in a decline but the Moving Average Convergence Divergence (MACD) oscillator is crossing the zero line now for an outright buy signal.
In this weekly Japanese candlestick chart of copper futures, below, we can see a number of lower showers that tell me that traders are rejecting the lows.
In this daily bar chart of SCCO, below, we can see that prices traded sideways in a tight four-month sideways trend that preceded a gap higher. SCCO is trading above the firming 50-day moving average line. The slope of the 200-day line is still negative.
The daily OBV line has been steady the past three months. The MACD oscillator is now bullish.
In this weekly Japanese candlestick chart of SCCO, below, we see an improving picture. Prices show a strong white real body to turn the short-term trend up. The weekly OBV line is starting to improve and the MACD oscillator too.
In this daily Point and Figure chart of SCCO, below, we can see an upside breakout and a price target of $57.
In this second Point and Figure chart of SCCO, below, we used weekly price data. Here the software yields a price target in the $70 area.
Bottom line strategy: Traders could go long SCCO on a one or two day shallow dip. Risk to $46 for now. $57 and then $70 are our price targets.
