Cole
Momentum Stock & Options Trading, Public Trading Journal
Freeport-McMoRan's chart sets up a move to $80+. It broke out to a monthly all-time high, the weekly 9MA held at the day's low, and the daily shows a very bullish inverse head and shoulders after touching the 200MA near $50. A trader also bought $1.6M of August 21 $70 calls, a flow flagged as highly confident. x.comÂ
Freeport-McMoRan is an excellent way to capture a structural commodities bull market. Goldman Sachs, in its first Buy rating, calls it the best exposure to a structural copper shortage, plus gold. Per Goldman, electrification lifts copper demand 2.1% a year to 2030 while falling ore grades raise costs. Grasberg's gold by-product and US leaching at about $1 a pound, aiming for 800 million pounds a year by 2030, could lift EBITDA margins above 50% and fund $19 billion-plus of free cash flow. x.comÂ
Freeport-McMoRan can grow copper output at high margins without building new mines, using proprietary leaching and heated solution injection in Arizona. These already add over 200 million pounds a year, with longer-term targets of 400-800 million. Barclays initiated at Overweight with a $77 target and UBS raised its target to $75. AI data centers, grid upgrades and a forecast copper deficit drive demand, while gold by-product credits lower net copper costs. x.comÂ
Freeport-McMoRan looks expensive against its earnings at $77.97. It trades at 38x trailing and 19x next year's earnings, while copper miners usually get 13x. Applying 13x to next year's $4.14 EPS gives fair value of $47.31 to $60.21, leaving the stock 30% above the high end. The valuation leans on forecasts, with forward EPS 103% above trailing. This is a valuation-levels read only, without fundamental work. x.comÂ
Copper, aluminum, Freeport-McMoRan and Rio Tinto can climb to their 2008 supercycle highs, 4-5x current levels, as AI data centers and aerospace infrastructure such as SpaceX drive a capex cycle rivaling the 2000s China buildout, a Hugh Hendry call from his George Gammon interview. Per Hendry, aluminum is mispriced: no one can earn a competitive return on a new North American smelter at spot, so prices must multiply to fund the capacity US supply-chain decoupling needs. Accumulate on breakouts. … Show more
Copper keeps setting all-time highs, now $6.65 a pound, on rising demand and an increasingly tight supply backdrop. Two of the world's most important copper miners, Freeport-McMoRan and Ivanhoe, have both cut ramp-up expectations for Grasberg and Kamoa-Kakula, respectively. x.comÂ
Alcoa is breaking out to a fresh 52-week high on heavy aluminum demand and a lack of supply. The breakout comes from a high rectangle, which per Bulkowski is the most reliable chart pattern for completing to target. The price target is 80. x.comÂ
Southern Copper looks expensive against its sales. At $203.92 and a $172.2 billion market cap, it trades about 98% above the high end of a $80.84-102.89 fair value range based on 5x mid-cycle sales. It also trades at 28x forward earnings, 11x EV/sales and a PEG of 5.41. x.comÂ
Copper miners should catch up to copper once oil comes down and logistics chains reopen. Supply pressure plus AI demand have created a perfect storm that pushed copper to new all-time highs. The pattern target is 115, with 92 as the breakout line. x.comÂ
Copper miners stand to benefit from a massive undersupply of copper right now, making the copper miners ETF a candidate for selling puts. x.comÂ
