Anticipating The Bounce In FCX
On Monday August 28, we posted a heads-up about FCX (Freeport-McMoRan) to our MPTrader members, writing:
FCX (Copper, Gold, Oil) producer has the right technical look (and a positive momentum divergence at Friday's low) of a completed pullback (44.70 to 37.74) within its larger bullish multi-month Coil formation. Last Friday's (8/25/23) low at 37.74 represented a very healthy 15.6% correction off of the 7/31/23 rally peak at 44.70 and also amounted to an exact Fibonacci 62% retracement of the 5/24/23 to 7/31/23 advance from 33.06 to 44.70.
That said, however, FCX needs to climb to and above 40.50 in the budding upmove from last Fri's low at 37.74, within which I need to see a bullish stair-step advancing price structure.
Finally, some important "IFs" we should be watching that will propel or repel a rally in FCX, such as 1) IF the US Dollar rally peaks and reverses... 2) IF Crude Oil and Copper Prices strengthen... and 3) IF the Chinese economy can pull itself out of its current nosedive... Last in FCX is 38.94...
Fast-forward a few days to this past Friday, where we see on the daily chart (see below) that FCX climbed from the August 25 low of 37.74 to a September 1 high at 41.82, or nearly +11%, which prompted us to post follow-up commentary:
FCX has taken out initial resistance at 40.50 and has started to accelerate higher toward my next immediate target zone of 42.20/50, and if (when?) hurdled, will head for a challenge of much more consequential resistance from 43.70 to 44.70 that will threaten a major upside breakout from its multi-month digestion period and pattern that has taken the form of a massive bullish Coil formation... Only a decline that breaks 39.60 will neutralize my currently constructive bias... last is 41.60...
Join me and our MPTrader members for continuing analysis of the technical, company-specific, and macro-related factors that will drive price direction in the upcoming days and weeks. Will China's new stimulus effort strengthen its economy enough to matter to FCX and to the cyclical names in general? Will US economic data continue to support a "Goldilocks" soft-landing narrative that argues for an end to the 18-month Federal Reserve rate hike cycle? Will an anticipated global manufacturing upturn amid relatively tight Copper supplies propel Copper prices higher, and positively impact FCX's revenues?
We discuss all the issues concerning FCX as well as opportunistic setups in many other individual equity names, sector ETFs, macro indices, commodities, and Bitcoin during their ongoing intraday dialogue in the MPTrader discussion room.