Few stocks can say they had a better 2009 than Freeport-McMoRan (FCX).
FCX is one of the big "bell cows" of the mining sector. It is the largest U.S.-based miner… and one of the world's largest producers of copper. It's a stock we track closely at DailyWealth.
After getting clobbered in late 2008, Freeport shares enjoyed a monster 300% rally last year. Copper prices were surging, and traders flocked into mining stocks. But as you can see from today's chart, that rally has fizzled. Shares are unchanged in the past six months… and have "bumped their head" on the $85 level three times. Even a terrific quarterly report this week was greeted with enormous selling pressure that sent shares down 3%.
There's a good case to be made that we should be worried about FCX and the copper price right now. Several mining insiders believe there is an enormous amount of copper being stockpiled and hoarded around the world. You can about read the situation here.
Long term, the Fed's funny-money program is going to devalue the dollar… which boosts the nominal price of commodities like copper. But in the short term, like one year, anything can happen. We say keep an eye on both the $85 level… and the short-term low at $66 per share. FCX tends to boom and bust, so a break of $66 puts it in bust mode… and validates the bear case for copper.
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