Freeport-McMoRan’s Technical and Fundamental Indicators



Technical and fundamental indicators

Freeport-McMoRan (FCX) closed at $10.54 on September 21. It rose almost 6% from its closing the previous day. The stock has gained 2.4% in September. This was preceded by a 20% fall in August. However, thanks to the sharp gains between February and March, the stock is still trading with decent YTD (year-to-date) gains of ~55%.

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Price action

So far, mining giants BHP Billiton (BHP) and Rio Tinto (RIO) have risen 25% and 10% in 2016, respectively. In comparison, Teck Resources (TCK) is trading with strong YTD gains of 377%. Note that along with copper, Teck Resources also sells coking coal and zinc. Although copper prices have fallen this year, zinc and coking coal prices have been strong. Higher zinc and coal prices have been the key drivers of Teck Resources’ spectacular price action this year.

Freeport’s recent price action has been driven by weakness in the broader basic material space (XLB) as well as company-specific factors. Freeport’s decision to sell its Deepwater Gulf of Mexico properties hasn’t gone well with some market participants. You can read more about Freeport’s recent asset sale in How a Key Asset Sale by Freeport-McMoRan Is Backfiring.

Series overview

In this series, we’ll look at some of the key industry indicators that Freeport investors should track. Freeport, like other mining companies, is impacted by the movement in underlying commodities. Copper, gold, molybdenum, and energy are the key commodities that Freeport produces. In this series, we’ll discuss the factors that are driving the performance of some of these commodities.

Along with these fundamental factors, you should also look at some of the technical aspects. In the next part of the series, we’ll compare Freeport’s technical trading parameters with other mining companies.


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