Copper Miner Worth Watching

By: Chris Ciovacco | Wed, Feb 15, 2012
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Freeport-McMoran Copper & Gold Inc. (symbol FCX) engages in the exploration, mining, and production of mineral resources. The company primarily explores for copper, gold, molybdenum, silver, and cobalt. Obviously, copper is an economically sensitive commodity. Weakness in FCX, all things being equal, is a negative for the markets and economy.

Similar to the technical weakness in Germany we showed on February 14, Freeport-McMoRan's weekly chart is rolling over in a similar manner to July 2011. The comments below only hold water if the negative setups hold through the end of the week. We all know weakness can turn into strength rapidly in a headline-driven environment.

Point C in the chart below highlights the price of FCX. Point B highlights the performance of the S&P 500. Compare points A and A2, which show weakness in the Full Stochastic indicator. Similarly, the MACD Histogram from last summer (point D) looks similar to the present day (point D2); both have "ticked down", which can foreshadow a change in trend. The same can be said for the slowing momentum illustrated with Williams % R (points E and E2).

FCX (Freeport McMoran ) NYSE + BATS

Freeport-McMoRan is also battling to stay above its downward-sloping 200-day moving average. The last time FCX failed to hold the 200-day it experienced weakness for two months, along with a general aversion to risk assets. The 200-day sits at 42.32.

FCX (Freeport McMoran ) NYSE + BATS

 


 

Chris Ciovacco

Author: Chris Ciovacco

Chris Ciovacco
Ciovacco Capital Management

Chris Ciovacco

Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors and tax advisors before making any investment decisions. Opinions expressed in these reports may change without prior notice. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. The investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is not necessarily a guide to future performance. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. All prices and yields contained in this report are subject to change without notice. This information is based on hypothetical assumptions and is intended for illustrative purposes only. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION CONTAINED IN THIS ARTICLE.

Ciovacco Capital Management, LLC is an independent money management firm based in Atlanta, Georgia. CCM helps individual investors and businesses, large & small; achieve improved investment results via research and globally diversified investment portfolios. Since we are a fee-based firm, our only objective is to help you protect and grow your assets. Our long-term, theme-oriented, buy-and-hold approach allows for portfolio rebalancing from time to time to adjust to new opportunities or changing market conditions.

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