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Is Freeport-McMoRan Stock Overbought?

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Nov. 20 2020, Updated 5:12 p.m. ET

Freeport’s technical indicators

Freeport-McMoRan (FCX) is scheduled to release its 2Q17 earnings on July 25. For a detailed pre-earnings release analysis, read Freeport-McMoRan’s 2Q17 Earnings: Here’s the Word on Wall Street. In this article, we’ll look at Freeport’s technical indicators ahead of its 2Q17 earnings release.

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Relative strength index

Moving averages and RSI (relative strength index) scores are among the most widely used technical indicators. An RSI score below 30 implies that a stock is oversold, while an RSI score above 70 indicates a stock is overbought. Based on July 21 closing prices, Freeport has a 14-day RSI score of 70.5, and Southern Copper (SCCO) and Teck Resources (TECK) have 14-day RSI scores of 82.5 and 85.6, respectively. Most mining companies saw upwards price action last week amid strengthening commodity prices (GLNCY) (BHP). As a result, we’ve seen an increase in RSI scores. Freeport’s RSI score suggests that it may be overbought.

Moving averages

Freeport is trading 5.3% above its 20-day simple moving average (or SMA) and 8.8% above its 50-day SMA, based on its July 21 closing price. The stock is approaching a key price level. The stock’s July 21 closing price of $13.01 is just short of its 200-day SMA of $13.08. The 200-day SMA has acted as a key support and resistance for Freeport stock. According to its most recent update, Freeport had a days-to-cover ratio of 2.8 on June 30, which was slightly lower than its ratio of 3.0 on June 15.

Along with these technical indicators, investors should follow copper market fundamentals. Continue to the next part of this series to see what’s driving copper prices this month.

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