FCX

FCX, are we there?

Hamilton

Here are the usual then, Jan. 19 2012, and now charts;

FCX jan 2012FCX dec 18 2015

Freeport is our favourite copper (and the largest goldmine by reserves) mining stock. Back in 2012 (see the blogs) we had a rough target of $10 or lower. This was not based on any particular prescient view on the price of copper in the future, nor was it based on the prospects of the housing market in China. Also we were blissfully unaware of huge copper finds like Ivanhoe in Mongolia or one or two others in Chile. Also as they were tearing out copper piping all over North America we did not know that copper would essentially cease to be used for home construction. What we did know was that there was an absolutely perfect example of a B wave in the chart. They are followed by a C wave down to, usually, a new low. That is exactly what we got.

So are we there? Judging by copper the stuff we are certainly close (see recent blog). Looking at the chart in more detail it is safe to assume that the drop from $38 or so over the past year and a bit is all a 5th wave. (C waves must be 5-waves!), either a straightforward one or a wedge of sorts;

fcx dec 18 2015 scopper dec 18 2015

As you can readily see, we are less than $1 away from the trendline (this is log-scale!), in fact we may already have done enough. Copper hit the $2 precisely. The RSI and the MACD on the stock are already acting positively. Somewhere here, soon, this should be a buy. Below is a picture showing the size of this thing; Sorry, it does not fit, see next blog.

FCX, Freeport-McMoRan Inc update and copper

Hamilton

First the then, Dec. 2012 and June 24th, 2015, and now charts.

FCX dec 2012FCX june 23 2015fcx aug 29 2015

We were bearish for a lot longer, please also see older blogs, but back in 2012 we set a credible EW target of about $10 and for copper itself of $2.20. FCX with the “Greenberg” deposit in Indonesia is, as far as we know, still the largest copper producer in the World. The $10 target derives from equality  between the C and A legs but did not create a new low, that is below the $8.40 of 2009. We got that with the $7.76 low last week. Copper, see chart below,then, Dec. 2012 and now, conveniently complied by dropping precisely to the $2.20 level.

copper dec 2012copper aug 29 2015

We do not know if Karl Icahn is an avid reader of this blog – we know there are 40.000 but we do not know who they are individually – but supposing he is  and did  take the above to heart and bought an eight and one half percent stake in FCX. If he bought at the low he is now up 25%, not bad for two days work. That represents about $80 mln. It could have been yours!

The 2012 A-B-C EW count for FCX is, of course, completely wrong (C waves must be 5 waves, not A-B-Cs) but the target is nevertheless accurate, at least so far..

FCX, Freeport-McMoran update

Hamilton

FCX dec 2012FCX june 23 2015

We have had a bearish outlook on copper and with it FCX for quite some time, see our blog of Dec. 2012 (Copper FCX) shown in part, above left. Today we do not agree with the count then presented but we do with the target of about $10. The drop from the second top in 2011 is a C wave given the very distinct B-wave before that. C waves ALWAYS subdivide in 5 waves so the A-triangle B-C on the left is simple not possible. With a slight adjustment we nevertheless get approximately the same result. Presently we must be in wave 5 which probable will become extended and definitely needs at least one more leg down. The $10 target fits with a number of different parameters the most compelling is that C will equal A and that the stock will hit its long term boundary line. By the way, that corresponds with copper at about $2.20 according to the old blog.

Copper, the stuff update and FCX, Freeport

Hamilton

copper s oct 2012copper dec 2012

The then (29th of Oct.) and now charts. This is a bona fide triangle, an E-Waver’s dream as these things are highly predictive and accurate. This triangle is in a B-wave position, not a fourth, therefore the expectation is for a C-leg to start any moment now and travel, perhaps, the same distance as the A-leg. That would bring copper to about $2.20 a pound and , yes, we are aware that the Chinese will do more to stimulate but for the moment their Shanghai index recorded a 3 year low. Stocks like FCX, Freeport will not fare well under such circumstances.

Here are the Freeport McMoran Copper and Gold then (Jan) and now charts for a comparison;

fcx s jan 2012FCX dec 2012

We recommended a sell at the time (at $45) even if it might go a little higher. At today’s level of , give or take $31 that is a tidy saving. The company decided to go into the oil business presumable to diversify. Presently it may be tracing out a similar triangle to the metal itself, even if it is running behind just a bit. The e–leg is missing but these can be awfully short so it wont take much to get the two realigned. Sell all copper related stocks, except perhaps Ivanhoe, TRQ see next..