It’s about time that FCX starts to correct from a nice 30% rally since early september. There are 2 gaps ($79 and $72) that have not been filled. The $72 will most probably remain as a gap unless economic conditions worsen.
The dollar may start to rally again as investors flee to safety amid the earnings seasons. With financials hinting that the rally has no more steam. Tonight, we await China’s PMI to confirm this commodity rally. Any poor figure may result in a crazy selloff on FCX, X, AA, CLF. Any good figure would most probably support this recent rally.
Look at the FCX chart. THere seems to be extremely good support at $76. Should FCX dip to that level, it is a screaming buy. Investors looking to trade copper long term should buy FCX at that level. At current prices, FCX seems to be overvalued, given the resistance level that must most probably be respected. Today’s selloff volume shows that more declines will most probably happen.
FCX has a knack of dropping continuously for the first 10 trading days of October. Look back at its history. Nevertheless, FCX will become a good buy at $76. I am doubtful to buy FCX at current prices. It was too high at $84, and it is too high now.
Tradeoff. Wait and get better prices.
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