No pattern yet but something to keep an eye on. Let’s start with the big picture.

Weekly Chart

2 key takeaways from the 10-year weekly chart (logarithmic scale):

  • The stock is prone to fast moves, check the velocity of the downtrend in 2008 and 2014-2015 and the uptrend in 2009 and 2016;
  • The stock has a strong history of reacting at support/resistance levels.

FCX weekly

Double top in 2008 and 2011 just above $50.

2012-2015 channel between support at $24 and resistance at $37.50 which broke down in late 2014 and got a re-test in 2015.

Latest example is resistance at $14.

 

Daily Chart

Zoom in to daily chart shows the resistance line that got hit April 29th.

Price may be forming an inverse head & shoulders pattern with left shoulder at last summer lows, head at January lows and right shoulder about to be made.

FCX H&S

A slight pullback to the summer of 2015 lows area would shake out a lot of hot money that is currently in a stock and replace them with stronger holders.

A minor bottom in that area would make a higher low against the January low and provide a great entry point.

 

The Trade

2 options for a bullish trade:

The 1st one relies on a higher low that would go in line with the head & shoulders pattern.

Wait for a minor low to be made and go long against it in anticipation of a breakout above $14.

FCX trade

The 2nd option implies waiting for the resistance line to be broken. It is the textbook version that can still work great particularly if the stock does not break it while extended on momentum oscillators.