Sell Signal Flashing on Copper Stock

Shares of copper miner Freeport-McMoRan Inc (NYSE:FCX) are 0.3% lower at $45.04 at last look, starting what could be a month-long trend as FCX trades near a historically bearish moving average

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, FreePort-McMoRan stock just came within one standard deviation of its 50-day trendline. Per White, five similar pullbacks have occurred over the past three years. One month after 40% of these signals, FCX had negative returns, averaging a 3.9% drop. A similar move would put the shares just above the $43 level.

This would also put Freeport-McMoran stock at risk of breeching its slim 5.9% year-to-date lead, and add to a 7.3% quarterly deficit. Also worth noting, FCX is on the brink of a third-straight monthly loss, so this historically bearish signal is bleeding into what could be another negative month. 

A shift in analyst sentiment could also provide tailwinds. Of the 16 in coverage, 11 brokerage firms call the mining stock a "buy" or better.

For those looking to bet on FCX’s move lower, options seem to be affordably priced. The equity's Schaeffer's Volatility Index (SVI) of 33% ranks in the relatively low 20th percentile of its 12-month range, meaning options traders are pricing in low volatility expectations right now.