Is FCX Preparing To Surge Higher?

Freeport-McMoRan, Inc. engages in the mining of copper, gold, and molybdenum. It operates through the following segments: North America Copper Mines, South America Mining, Indonesia Mining, Molybdenum Mines, Rod and Refining, Atlantic Copper Smelting and Refining and Corporate, Other and Eliminations.

Take a look at the 1-year chart of Freeport (NYSE: FCX) below with the added notations…

Chart of FCX provided by TradingView

After rallying for the past 6 months, FCX appears to be consolidating in a bullish flag pattern. The pattern gets its name from the idea of a “flagpole” created by the recent rally in price, then followed by the creation of the current “flag” (blue) formation. A flag price pattern implies a break higher, but is certainly not a guarantee. 

The Tale of the Tape: FCX is consolidating within a flag pattern. A break above $52 area should lead to higher prices, thus a long trade could be made. 

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT 

 

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