This Trade Targets a Potential Return of Over 20%

Freeport-McMoRan Inc (NYSE:FCX) — I last reviewed this major natural resource company, with holdings in copper, gold, molybdenum, oil and gas, on May 27 with a suggested buy price of under $11.50 and a target of $12.50.

The stock made the target on July 27 at $12.56 then began a decline which ended with a low under $10 in October.

Throughout the decline, Standard & Poor’s maintained a “four-star buy” on FCX and on Nov. 22 raised their 12-month target by $3 to $18 based on improvements in the company’s balance sheet and significant leverage to copper prices.

S&P forecasts copper to be in a long-term uptrend because of basic supply/demand fundamentals.

Thus, S&P is maintaining its 2016 earnings-per-share estimate at 40 cents, up from a loss of $11.31 in 2015, and raises its 2017 estimate by 15 cents to $1.25.

Following the fall to under $10 in October, FCX reversed up and in November executed a Break-Away-Gap at $12.16 to $12.78 followed by two small Continuation Gaps. This positive technical action attracted buyers who then drove the stock to over $16 by late November.

The stock retraced part of the gain in December, basing at the major support line at $13.20, and the 50-day moving average at $13.32. With sellers declining and MACD turning up close to important chart support features, FCX appears to be a strong candidate for a trade from $13.50 to $16.50 for a proposed return of over 20%.

Long-term investors may also purchase FCX for total returns projected in excess of 30% in 12 months.

— Sam Collins, Trade of the Day

The One Stock That Could Make You a Marijuana Millionaire [sponsored ad]
FDA approval and a pipeline of breakthrough marijuana medicines are about to send this stock soaring another 1,303%, making millionaires out of many early shareholders. But time is running out for you to get in on the ground floor. This Special Report will give you all the details, absolutely free.

Source: Investor Place



Advertisement