Copper Stock Picks Up Bear Notes After Earnings

FCX is on track for its worst week since early August

Managing Editor
Jan 24, 2020 at 10:55 AM
facebook twitter linkedin

The shares of Freeport-McMoRan Inc (NYSE:FCX) are down 2.2% to trade at $11.71 this morning after receiving two price-target cuts. J.P. Morgan Securities and Deutsche Bank trimmed their targets to $14 and $13.50, respectively, in response to the copper miner forecasting higher costs in 2020. 

Yesterday, FCX gapped lower by 2.8% in the wake of its quarterly report, which in addition to the higher costs, reported lower current-quarter mining output. The shares are now pacing for their worst week since Aug. 2, and Wednesday breached long-term support at their 50-day moving average. 

The recent bear notes could be a sign of things to come. Of the 14 brokerages covering FCX, nine rate it a "strong buy," with zero "sells" on the books. Plus, the consensus 12-month price target of $14.44 is a 22.5% premium from its current perch. 

In the options pits, traders are focusing on puts. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.37 sits two percentage points from an annual high. This means short-term speculators are more put-heavy than usual.

It's an attractive time to purchase premium on short-term FCX options. The stock's Schaeffer's Volatility Index (SVI) of 37% registers in the 19th annual percentile. In other words, near-term FCX options have priced in lower volatility expectations just 19% of the time over the past year.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners