Freeport-McMoRan, Inc. (FCX:NYSE)
Price at Preparation: $39.41 (Jan 13th, 2025)
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What they do
Freeport-McMoRan, Inc. (FCX:NYSE) engages in the mining of copper, gold, and molybdenum. It operates as follows:
- North America Copper Mines: Operates open-pit copper mines in Morenci, Bagdad, Safford, Sierrita, Miami in Arizona and Chino, and Tyrone in New Mexico.
- South America Mining: Includes Cerro Verde in Peru and El Abra in Chile.
- Indonesia Mining: Operates the Grasberg minerals district that produce copper concentrate containing significant quantities of gold and silver.
- Molybdenum Mines: Includes the Henderson underground mine and Climax open pit mine, both in Colorado.
- Rod and Refining: Consists of copper conversion facilities located in North America and includes a refinery, and rod mills.
- Atlantic Copper Smelting and Refining: Smelts and refines copper concentrate and markets refined copper and precious metals in slimes.
- Corporate and Other: Offers oil and gas operations, and other corporate and elimination items.
Welcome back to Theta Bandits Top Pick Tuesday, where we search the markets to bring you fresh ideas that could be a potential winner in any portfolio.
Opinion
Freeport-McMoRan, Inc. (FCX:NYSE) is a stock that is always on my radar primarily for the exposure to the copper market, which should be in high demand for infrastructure/construction wiring, and EV motors as two examples. You might ask: “if it is always on the radar, why we are bringing this to your attention today?”
The answer is two words – “technical analysis”.
Over the past year the stock has traded within a range, using historical data as our guide there is a high probability that the pattern will repeat. This is shown in the chart (plan section below) with the yellow lines. While the stock is trading near it’s 52-week lows, it is starting to show some upside potential, which we can try to take advantage of!
A second data point to consider is the analyst street consensus, which has 16 Buys, 9 Holds, 1 Sell with 12-Month Price Targets (PT) as follows:
- Low: $46.00 USD (+16.72%)
- Average: $53.91 USD (+36.97%)
- High: $62.00 USD (+57.32%)
Plan
As usual, find the chart below with following colors marked:
- Blue: 52-week high.
- Red: 52-week low.
- Green: 12 Month PTs (high / avg / low).
- Orange: Support/resistance lines.
- Yellow: Our plan.
Since we mentioned the reason for the trade is “technical analysis”. Let’s breakdown the chart below and produce a potential plan. As usual we have the 52-week high / lows marked as well as the 12-month price targets (PT). As mentioned previously there are yellow arrows marked on the chart, these are showing the pattern within the range of the year and after a downtrend the stock usually has a nice rebound, which is what we are looking for. Towards the end of 2024 and beginning of 2025, this latest downtrend is looking to start a rebound, if this holds course and moves up, potential targets have been identified on the orange support / resistance lines of $44.40 USD, $47.07 USD and $50.77 USD. Since the stock will be getting to the top of last year’s range, there are two bonus levels at $52.46 USD and the 12-month average PT of $53.91. Nearing the top of the range there is more risk of reversal, hence the levels to secure profit should be tighter. Notice the 12-month high PT of $62.00 USD is being ignored as this is out of the trading range plan. Not all trades go our way and since we are looking for a trade in a range, we have identified the previous 52-week low of $36.26 USD as a point to cut the trade with a small loss. Also make sure to use and update stop-losses to protect the initial investment.
Once in the trade, those familiar with our methods know we like to mitigate risk on everything. This can be achieved by securing as much of the original investment as possible, until there are only profits remaining to do the heavy lifting for the remainder of the trade – risk free!
This is only one method how to trade this stock. We discuss other potential methods to attack this stock through our discord server community and we will discuss this trade live IF you sign up to attend our Theta Bandits Webinar – When we trade together, we learn together!
RISKS
The goal is to grow capital by securing profits along the way and limiting losses. Make sure to plan to trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
If you’ve been finding our picks helpful, imagine what trading live holds. You know what to do 👇
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
