Negative Technicals for FCX

Freeport-McMoRan Copper & Gold (FCX) is scary technically at the moment. On March 2 it broke below its Oct 4 up-trendline at about 41 1/4.

Unless it can climb back above the trendline it broke in the 41 1/4 to 41.80 area, it's likely to head south and continue its weakness off of the January 2012 low and confront the trendline that originated all the way back in 2008. That line cuts through the price axis at about 32.60. If that is broken, then FCX is likely to test very critical support -- multi-year support -- from August 2009 at the 29-30 level.

That can be construed as the neckline of a major head-and-shoulders top that goes all the way back to August 2009. If that's broken, FCX will have targets anywhere from 14 down to 8.

So, FCX needs to be watched carefully largely because of China, which has come out with weak data lately. FCX depends on the procurement of goods from especially China, and if the lights dim in China, the lights will definitely dim to an even lower level in FCX, which must hurdle 41.60/90 to avoid heading lower.