Copper Stock to Buy Before Its Next Run Higher

SCCO has added 59% in the past three months

Digital Content Manager
Jan 17, 2023 at 2:29 PM
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Southern Copper Corp (NYSE:SCCO) is down 2.9% to trade at $74.85 at last check, taking a breather alongside Wall Street after surging to its highest level since April in the previous session. The stock still boasts an 11% year-over-year lead, though, and has added 59% in the past three months. Better yet, a historically bullish signal now flashing could give the security a short-term boost. 

According to Schaeffer's Quantitative Analyst Rocky White, SCCO's peak comes amid historically low implied volatility. This has been a historically bullish combination for the shares in the past. White's data shows two other signals in the last five years when the security was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) stood in the 20th percentile of its annual range or lower. This is currently the case with Southern Copper stock's SVI of 36%, which stands in the 16th percentile of its 12-month range. 

One month after these signals, SCCO was higher, averaging a 9.1% return.  From its current perch, a move of similar magnitude would place the security above $81 for the first time since May 2021.

Options players lean bullish. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SSCO's 50-day call/put volume ratio of 9.29 ranks higher than 94% of annual readings. In other words, calls have rarely been more popular. 

Short sellers are starting to hit the exits, too, with short interest down 12.3% in the two most recent  reporting periods. Still, the 5.75 million shares sold short make up 6.8% of the equity's available float.


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