Fairlead Strategies Idea Generator

Freeport-McMoRan (FCX) and Update (PCH)

Before we get into our latest idea, we have an update on PCH, which is now below our stop-loss level ($57.61) after filling its gap. Weakness in our short-term indicators supports reducing exposure into strength. Otherwise, our open recommendations stand, benefiting from the recovery yesterday/today.

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Day-to-day volatility has created a more difficult trading environment, but we are always on the lookout for opportunities. Our latest idea: Freeport-McMoRan (FCX) aims to take advantage of an oversold bounce that is underway in copper prices.

• FCX has been a long-term source of outperformance versus the S&P 500 Index (SPX) and has recovered from a corrective phase. Long-term momentum is positive, and support is nearby based on the rising weekly cloud (i.e., the shaded area on the chart).

• The stock made a higher low recently and has regained positive intermediate-term momentum per the weekly MACD and stochastics, supporting additional outperformance as FCX advances within its long-term uptrend.

• Long-term resistance at the all-time high near $46.10 seems like an appropriate intermediate-term target, and we would place a stop-loss below support denoted by the daily cloud model (not shown), which comes near $35.80.

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Freeport-McMoRan (FCX, $39.95)

Target: $46.10

Stop Loss: $35.80