A week ago, we noted to our members to keep a close eye on Freeport-McMoRan Inc. (FCX).
The chart pattern argued for the price to thrust into a new upleg after completing a 3-week correction.
The correction, from 15.27 on July 26 to 13.81 on Aug 11, held key multi-month support, and positioned the chart into a bullish cup-and-handle formation.
Given the compelling technical set-up — portending greater demand and inflationary pressures in copper and others metals — we added FCX to our model portfolio on August 17 at 14.47.
The chart linked below shows the pattern, which included a bullish flag and the start of what appeared to be break out.
Five days later, JPM issued a bullish report about base metals prices, noting it was looking for better earnings in CENX, AA, TECK…and FCX!
Meanwhile, Jefferies noted that materials stocks are “experiencing and enjoying underlying pricing power, a weak dollar, an expansionary China budget and M&A,” even amid fears that President Trump’s infrastructure plans will be at delayed or eventually diluted.
All of which helped spur a rally in FCX to a high of 15.46 on Tuesday August 22, with the stock closing at 15.07.
Where is FCX headed next?
FCX thrust above its January-August resistance line on Tuesday morning, taking out its prior rally high at 15.27. As long as the stock can sustain above 15.00, the price structure projects directly to 16.60-17.00 next.