FCX drops to lowest close since July 9th
Freeport-McMoRan Inc. (FCX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, FCX ended the month 11.67% higher at 12.92 after losing $0.02 (-0.15%) today, underperforming the S&P 500 (0.77%). Today's close at 12.92 marks the lowest recorded closing price since July 9th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (FCX as at Jul 31, 2020):
Friday's trading range has been $0.26 (2.0%), that's far below the last trading month's daily average range of $0.48. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for FCX.
Two candlestick patterns are matching today's price action, the Takuri Line and the Tweezer Bottom which are both known as bullish patterns.
After trading down to 12.73 earlier during the day, the share bounced off the key technical support level at 12.75 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on July 24th, FCX gained 3.35% on the following trading day. After having been unable to move lower than 12.73 in the previous session, the market found buyers again around the same price level today at 12.73.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the close-by swing low at 12.70 where further sell stops might get activated. With prices trading close to this year's high at 13.87, upside momentum could accelerate should Freeport-McMoRan be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Tweezer Bottom" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Freeport-McMoRan. Out of 18 times, FCX closed lower 55.56% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 50.00% with an average market move of -4.02%.