In NFTRH 430 it was noted that FCX (a global producer of copper, gold and other ‘resources’) looked interesting (as a bottoming pattern) by the multi-stock weekly chart we have added to the Commodities segment. Let’s take a closer look, first at the daily chart.
As with copper itself, FCX declined to test support of the big, post-election spike. It held support and bounced up again and like copper, has not made a higher high… yet, anyway. MACD looks pretty good and RSI is okay too. Copper’s AROON (daily trend) is up and although it is not shown, FCX’s has not flipped to ‘up’ yet. I would like to see FCX hold the rising 50 day moving averages as support because a decline to test support again is not needed.
The weekly chart shows the constructive pattern we noted on the multi-stock chart and shows 2 moving averages that are pinching together. A cross to up could have the opposite implication to the cross down as noted by the red arrow. 12.50 looks like very key support. MACD, RSI and AROON are all looking good.
If I have a caveat about this resource play or any others I hold or am watching, it is that it seems too obvious to me that Trumponomics is a play on resources. The contrarian in me is always suspect. But the chart is the chart and that is a constructive looking pattern that has broken above resistance (now the green shaded support area), tested it and so far held above it. If that support holds, the pattern measures to around 23.50.
Buy Target: 12.50 to the current level, depending on whether you are willing to let it go if it does not decline.
Sell Target: 23 or thereabouts, unless you are an investor and an inflationary cycle is engaged.
Stop Loss: Below 14.00 if buying now (very tight stop) or a support break of 13 (a more lenient stop). If buying 12.50 to 13, think about 11.50, which is below the daily SMA 200 (currently 12 and rising).
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.