Why copper stocks are looking interesting again: an analysis of the price chart


It’s not just Freeport McMoran. Other copper mining stocks also rallied.

An analysis of the copper stock price chart shows why investors might want to reconsider the sector. After a sharp rise in prices after the pandemic lows of March 2020, the group peaked in early May and started selling. Months and weeks of decline can end if you look closely at the price chart indicators.

The copper the metal looks like this on a daily close basis:

After breaking through the dotted red bearish trendline earlier this month and soaring to the May high, the metal sold off. This type of action is not unusual after sudden action and continues to rise from early to mid-October. Now that the metal has returned to the 50 and 200 day higher moving average zone, things could get interesting again.

The Global X Copper Miners ETF now looks like this:

The downtrend line connecting the early May peak to the mid-September high was broken upward in early October. The price took off and peaked just above 40 before selling its shot. The moving average convergence / divergence indicator (MACD, below the chart) diverges positively from the July low. Although the price has retreated, it remains above the 200 and 50 day moving averages.

Vedanta Daily Price Table looks like this:

This New York Stock Exchange copper miner has been in basic uptrend mode since at least March. You can see how it tends to increase, move back to the 50 day moving average area (in blue), and then continue to increase. Note that Vedanta’s price consistently stays above the 200-day upward moving average (in red).

Southern Copper Corporation Daily Price Chart looks like this:

The South American copper miner in October broke the downtrend line that connects the May high to the August high. Even with this week’s pullback, it remains above the 50-day moving average (in blue). Note that the moving average convergence / divergence indicator (MACD, below the price chart) diverges positively from the June low to the September / October lows.

here is the daily price chart for Teck Resources:

Despite this week’s sales, the copper miner remains in an uptrend, above both its 50-day moving average (the blue line) and its 200-day moving average (the red line). The fact that both short term and long term moving averages are in uptrends is seen as solidly bullish by most price chart analysts.

These are not buy recommendations. The fact that copper is a necessary metal for semiconductor manufacturing and that these chips are in demand globally is probably having an effect. It’s unclear how long this momentum could continue, but for now, copper stocks may be worth investigating.

No investment advice. Do your own research and always consult a registered investment advisor before making a decision.