FCX Stock Gets Hit as Copper Prices Slide

The majority of analysts have reservations over the mining stock

by Lillian Currens

Published on Jul 5, 2019 at 2:52 PM

Mining concern Freeport-McMoRan Inc (NYSE:FCX) is edging lower today, along with other sector peers, as copper prices come under pressure. The equity is down 0.2% at $11.28, and earlier slipped beneath the $11 region, which it has been testing in recent weeks.

Looking more broadly, the equity has been attempting a bounce off its two-year low of $9.47 from May, but was met with stiff resistance at its 180-day moving average. Still, the stock boasts a 9.5% year-to-date gain.

In the options pits, traders have been speculating on more downside for FCX. The security currently sports a 50-day put/call volume ratio of 0.35 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 98th percentile of its annual range. This suggests that options players have had a healthier-than-usual appetite for puts of late. 

The brokerage bunch has echoed this bearish sentiment, with seven "hold" or worse ratings on the table, compared to only four "strong buy" ratings. The consensus 12-month target price, however, is at a 27.4% premium to current levels, which could make FCX prone to price-target cuts, should some of this negative action hold on the charts.

Should investors choose to speculate on Freeport-McMoRan's next move, options are attractively priced right now. The stock's Schaeffer's Volatility Index (SVI) of 33% sits near a 52-week low. This means near-term options traders are pricing in relatively low volatility expectations. 


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