Use Weakness in Freeport McMoRan as an Opportunity

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Keep an eye on Freeport McMoRan (FCX).

The stock has become far too oversold to ignore.

Relative strength (RSI), MACD, and Williams’ %R are all over-extended in oversold territory, and just beginning to pivot higher.  From a current price of $37.51, we’d like to see a near-term gap refill around $39.90, and an eventual test of $45 a share.

We also have to consider that copper is still seeing a good deal of demand.

Trafigura Group believes the metal could hit $15,000 a tonne over the next decade. Goldman Sachs says it could rally to $10,500 over the next 12 months.  Citi says it could reach $12,000 by 2022.  All as demand from decarbonization efforts produces a potential deficit.

In addition, according to Barron’s, “Supplies, already tight as the global economy recovers, could be further strained by a predicted fivefold rise in green energy demand in the current decade, leading to significant shortages, starting in the mid-2020s, according to a report by Goldman commodity analyst Nicholas Snowdon.

We’d use the weakness in FCX as a buy opportunity.

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