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Monday, January 24, 2022

FCX Stock Leading Mining Stock Rally; bhp break out

fcx stock, bhp (BBL), Southern Copper (SCCO) and Tech Resources (TECK) surged higher on Wednesday as copper futures near a three-month high. The metal, regarded by many as an economic bell, is indicating strong global growth ahead.


The near-term copper futures contract rose to $4.58 a pound, up about 3.5% on the day. For the past one month, copper was trading in a range of $4.35 to $4.45 and then broke the upside.

Inflation measures in China eased sharply during December, data released on Wednesday showed, fueling speculation that a new round of stimulus support could be on the way. Industrial metals led by copper will be a major beneficiary.

A fall in the US dollar versus other currencies is also contributing to the copper move. In addition, traders can keep an eye on potential mining strike activity. Tech Resources said it received notification of a possible strike at its Highland Valley copper mine in British Columbia within 72 hours.

However, updrafts for copper plays and other mining stocks lost little steam as the morning progressed. Major stock indexes fell below their highs as Treasury yields firmed up after falling in the wake of the CPI report, which showed US inflation as warmer than in 39 years.

Economists are beginning to think that the speed at which the Omicron variant is peaking in different parts of the world could pave the way for broad-based expansion in much less order, with the transition easing. However, the spread of the Omicron variant in China remains a wild card, as Beijing insists on a lockdown to control COVID.

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FCX stock leads

freeport-mcmoran (FCX) shares jumped 5% to reach 45.15 on Wednesday. FCX stock moved above a buy zone above the 41.70 cup-with-handle buy point that went through 43.79.

BBL stock, the US depository receipts of Australian diversified mining giant BHP Group Plc, rose 4.4% to 66.15. This put the stock in a buy range, moving up from the 63.39 buy point to 66.56.

Southern Copper remained in rally mode last week after reclaiming its 200-day line. SCCO’s stock rose 4.85% to 69.21.

TECK stock has also become out of reach. TECK rose 5.4% to 54.18 on Wednesday. The stock has been increased after clearing 30.01 buy point on Friday.

FCX stock gets a boost from Freeport being a relative pure-play on copper. Tech Resources is a relatively minor copper player, but that is expected to change when production begins at its Quebrada Blanca Phase-II copper project in Chile. The company expects this to happen in the second half of 2022. Tech has also been bullish on demand for its steelmaking coal in recent months.

Other diversified mining stocks, including Rio Tinto, are also looking strong. On Tuesday, RIO stock cleared its 200-day line breaking above the down-sloping trend line. Shares of Rio rose 2.2% to 76.07 on Wednesday.

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