Last week, after several readers brought the concerning price action in Freeport McMoRan to my attention, I wrote a post offering my analysis as to why the 6% drop in $FCX was likely to be a false breakdown signal. Following the stock as closely as I do, the normally market leading stock seemed to be more interested in filling a technical gap more than in making grand prognostications.
Fast forward to today, and the stock is breaking out of a multi-week consolidation. Again, I am skeptical of the whole concept of an imminent market washout given how constructive $FCX‘s chart is. If the stock can get above $76.25, I would expect a quick run up to $78/$79.
I have also included a weekly chart of $CAT, another firm that is a highly economically sensitive and leveraged to the global economy. The weekly chart shows a healthy uptrend in tact since March of 2009. The hardcore bears can quote an awful lot of economic data these days but, given all of the bad headlines over the past few months, how can they rebut the lack of weakness in Caterpillar?
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hey chess – isn’t the recent strength in fcx just dollar weakness? i trade crude and in the face of the worst fundamentals in over 30 years it’s up almost 3% today all because of dollar weakness/equities strength and not the other way around. just saying. appreciate your posts.
Perhaps that is surely a factor. However, if the market is heading for more serious pain, FCX will be letting us know.
Good call Chess. Perhaps we should create a list of leaders such as FCX and CAT.
Great idea, thanks.