Thinking about buying Freeport Macmoran (FCX)? Here’s your trade. (May 06, 2016)
Freeport Mac ( NYSE:FCX ). I want to show you a couple different things here. First of all it’s a really good solid breakout here. I think Freeport ( NYSE:FCX ) is a stock that you want to own. It’s got a lot of things going for it on both the daily and the weekly chart. Here’s this kind of squeeze here, a breakout to the upside, and then this little pullback, that so far is holding. You get a nice crossover where the 50-day moving average crosses over the 200. We’ll zoom out here and I would say this is really a decisive break of this downtrend.
Look at the weekly chart. This weekly charts shows what could turn out to be a really impressive inverse head and shoulder pattern. Left shoulder, head (kind of a conehead there), and a right shoulder. And then we connect the points in-between the left shoulder and the head, and then the head and the right shoulder, and that’s this point, and this point. So that’s our head and shoulder pattern. We’ll say this is at 3.50 up to $10.00 or so, so that’s $6.50, $10.00 here, I’ve got to go with $17.00. So I’m looking at Freeport Mac ( NYSE:FCX ) and my price target, not a prediction. This would be my price target as I look for a particular trade and think, “Okay, what’s my expectation to get out of it?” I would expect the stock to move up to $16.00 or so, maybe 17.00.
That’s how you do a measured move with a head and shoulder pattern. The weekly head and shoulder patterns are, in my view, much more reliable than daily head and shoulder patterns; because they occur over a long period of time, by definition, so the moves can be bigger. So that’s my idea on Freeport Mac ( NYSE:FCX ). If it pulls back any more, say closer to $10.00, I think you want to buy this. The metals trade is still alive and well; it’s going to gyrate around a bit as the news comes out on various things. But these are stocks, Freeport, Tech Resource, some of the gold stocks, these are stocks that you want to own.
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