Freeport’s technical indicators
Traders and investors analyze technical aspects while making market entry and exit decisions. Moving averages and the RSI (relative strength index) are among the most widely used technical parameters.
Generally, an RSI below 30 signifies oversold positions while an RSI above 70 is associated with overbought positions. In this part of the series, we’ll look at Freeport-McMoRan’s technical parameters and compare them with those of other miners.
Based on the closing prices on August 19, Freeport-McMoRan (FCX) and Southern Copper (SCCO) have 14-day RSIs of 47. BHP Billiton (BHP) and Teck Resources (TCK) have 14-day RSIs of 61 and 56, respectively. With respect to RSI, we don’t any conclusive overbought or oversold positions in these mining companies (XME).
Looking at the moving averages, due to the recent downward price action, Freeport-McMoRan and Southern Copper have dipped slightly below their respective 20-day moving averages (or DMA). However, BHP is trading 4.3% above its 20 DMA and 11.5% above its 100 DMA.
Resistance and support levels
Freeport-McMoRan has been trading in a narrow price channel for quite some time. The stock touched a closing high of $13.14 on July 18, but it could not sustain that level. Later, the stock made multiple failed attempts to breach this level. Therefore, this price level should continue to act as an important resistance level in the near term. On the downside, its major horizontal support level is $10.50.
Meanwhile, along with these technical aspects, one should also look at the various fundamental drivers. In the coming parts of this series, we’ll see how different fundamental factors could drive Freeport. Before we address that issue,we’ll see how Wall Street is currently rating Freeport-McMoRan in the next part.