A bearish base metals sector
Freeport-McMoRan (FCX), one of the largest copper producers in the world, has fallen more than 70% since the beginning of 2015. The bearishness in the entire base metals sector pushed Freeport’s prices down to multiyear lows.
Freeport maintains strong bearish sentiment
As you can see in the above graph, the price of Freeport-McMoRan has been below the 200-day moving average for all of 2015. This is a bearish signal. You can also see that except for the end of May to mid-July, the higher moving averages were generally above the lower moving averages. The 200-day, 100-day, and 50-day moving averages all trended downward. If the higher moving averages are above the lower moving averages and they all align downward, then the situation is very bearish.
Freeport fell 71.4% from its peak in 2015
The highest day’s close for Freeport-McMoRan in 2015 was $23.66 on May 1. Since the peak in May, Freeport has fallen 71.4%. The lowest day’s close in 2015 was $6.12. Freeport is currently trading at 10.6% above that. Prominent price levels in 2015 were $23.66, $17, and $10. They’re expected to act as important support and resistance levels in 2016. As you can see in the graph, Freeport shares a strong correlation with copper prices. Since the beginning of the year, copper has fallen 25%. Freeport has fallen 71%.
Other base metal miners also lost a significant portion of their values in 2015. Vale SA (VALE), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) fell 60%, 72%, 41.4%, and 37%, respectively. Base metal ETFs were also on a downtrend for most of 2015. The SPDR S&P Metals and Mining ETF (XME) fell more than 50% during the year.