Schaeffer's Top Stock Picks for '25

Freeport-McMoRan Inc. (FCX) Bounce Sparks a Rush of Bullish Betting

Freeport-McMoRan Inc's (FCX) February 20 call is being bought to open today

Jan 16, 2015 at 2:23 PM
facebook X logo linkedin


It's been a volatile week of trading for Freeport-McMoRan Inc (NYSE:FCX). On Wednesday, the shares plunged nearly 11% amid a sharp drop in copper, and this afternoon, the equity is up 4.1% to trade at $19.09. Although FCX's 14-day Relative Strength Index (RSI) of 24 suggests a near-term bounce may have been in the cards, today's gains aren't enough to sate options traders, who are calling for a move north of the round-number $20 mark over the next five weeks.

30-Minute Chart of FCX Since Monday, Jan 12

Taking a quick step back, calls are trading at 1.7 times what's typically seen at this point in the day, with a healthy portion of the day's action centered on the February 20 strike. All signs point to buy-to-open activity, as traders bet on the stock to be sitting north of $20 at the close on Friday, Feb. 20, which is when the options expire.

With FCX's fourth-quarter earnings report tentatively slated for release at the end of this month, these short-term speculators are willing to pay up for their bullish bets. Not only does the equity's Schaeffer's Volatility Index (SVI) of 55% rank in the 96th annual percentile, but its 30-day at-the-money implied volatility of 54.3% stands above 99% of similar readings taken in the past year, and earlier touched a 12-month high of 57.5%.

Outside of the options pits, optimism is high toward the long-term laggard. Of the 15 analysts covering the shares, 12 have doled out a "buy" or "strong buy" recommendation, with not a single "sell" to be found. Plus, the consensus 12-month price target of $32.31 stands at a 69% premium to the stock's current perch. Should Freeport-McMoRan Inc (NYSE:FCX) resume its withstanding trajectory -- the shares have shed more than half their value since hitting an annual high of $39.32 on July 10 -- a round of downgrades and/or price-target cuts could translate into a fresh wave of selling pressure.

 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?

 

 

(function(doc, script) { var js, fjs = doc.getElementsByTagName(script)[0], frag = doc.createDocumentFragment(), add = function(url, id) { if (doc.getElementById(id)) {return;} js = doc.createElement(script); js.src = url; id && (js.id = id); frag.appendChild( js ); }; // Google+ button //add('https://apis.google.com/js/platform.js', async="defer"); // Facebook SDK add('//connect.facebook.net/en_US/all.js#xfbml=1&appId=772755279557744', 'facebook-jssdk'); // Twitter SDK //add('//platform.twitter.com/widgets.js', charset='utf-8'); fjs.parentNode.insertBefore(frag, fjs); }(document, 'script'));