Southern Copper Makes an Upside Breakout
The price of Southern Copper is strong.
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It was reported Wednesday that China's top copper smelters have agreed on a rare joint production cut. Copper futures prices rallied, but more interesting is the upside breakout in the share price of Southern Copper SCCO.
Let's check out the charts and indicators.
In this daily bar chart of SCCO, below, I can see that prices have broken out to the upside breaking above the highs of August and December. Prices are trading above the flat 50-day moving average line and above the rising 200-day line. The trading volume has increased in March as prices have turned higher.
The On-Balance-Volume (OBV) line has not broken out to a new high but it is moving in the right direction. The Moving Average Convergence Divergence (MACD) oscillator just turned higher for a fresh outright buy signal.
In this weekly Japanese candlestick chart of SCCO, below, I can see that prices are emerging on the upside from a large bullish continuation pattern. Prices are trading above the rising 40-week moving average line.
The weekly OBV line is neutral at best and trading volume has been shrinking but that should change if the breakout is for real. The MACD oscillator is above the zero line.
In this daily Point and Figure chart of SCCO, below, I can see an upside price target in the $102 area.
In this weekly Point and Figure chart of SCCO, below, I can see an upside price target in the $125 area.
In this bar chart of the continuous futures contract of Copper, below, I can see the strength in the futures market of the underlying metal.
Bottom line strategy: I have no special knowledge of what China is doing but the price of SCCO is strong. Traders could go long SCCO on a two day dip. Risk to $86 for now. $100 and then $125 are my price targets.
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