Reasons for likely short pull back:
FCX is encountering a historical/psychological resistance @ ~$40.
FCX is at the top of its current Pitchfork price channel.
FCX is overbought (above 75 on RSI).
Reasons for likely recovery:
Fundamental Analysis - there is a shortage of copper for surge in post COVID extreme lockdown manufacturing.
- copper is an essential element in the production of most electronics, especially EV/alternative energy - also crucial in normal combustion vehicles
Sentimental Analysis - FCX just avoided being purchased by a faltering company Barrick Gold, investors responded well to that
- industry news points to continued increases in demand for copper in EV/alt energy
- FCX just posted a surprise positive 24% in earnings with no signs of diminished performance moving forward
Technical Analysis - FCX has established a strong price channel since its low point during the initial COVID sell off
- FCX has been over 70 on the daily RSI 7 times since the COVID sell off and has risen in value over 600%
PLAN
Entry Price: $32
TGT Sale Price: 1st - $44, 2nd - $49, Final- $55
Stop Loss: $24 or breaks the price channel
Max Position Size: 5% of portfolio
Note - recent administration tax executive order may cause more severe market correction. Watch for signs of more dramatic pull back before entering long.
FCX is encountering a historical/psychological resistance @ ~$40.
FCX is at the top of its current Pitchfork price channel.
FCX is overbought (above 75 on RSI).
Reasons for likely recovery:
Fundamental Analysis - there is a shortage of copper for surge in post COVID extreme lockdown manufacturing.
- copper is an essential element in the production of most electronics, especially EV/alternative energy - also crucial in normal combustion vehicles
Sentimental Analysis - FCX just avoided being purchased by a faltering company Barrick Gold, investors responded well to that
- industry news points to continued increases in demand for copper in EV/alt energy
- FCX just posted a surprise positive 24% in earnings with no signs of diminished performance moving forward
Technical Analysis - FCX has established a strong price channel since its low point during the initial COVID sell off
- FCX has been over 70 on the daily RSI 7 times since the COVID sell off and has risen in value over 600%
PLAN
Entry Price: $32
TGT Sale Price: 1st - $44, 2nd - $49, Final- $55
Stop Loss: $24 or breaks the price channel
Max Position Size: 5% of portfolio
Note - recent administration tax executive order may cause more severe market correction. Watch for signs of more dramatic pull back before entering long.
Comment:
This one seemed to work out very well - could have been sold for $44 on 7May21