Freeport-McMoRan Inc. (FCX) shares jumped nearly 15% on Tuesday after the company reported mixed second quarter financial results. Copper prices soared more than 4% after the International Monetary Fund reiterated its strong growth outlook for China, which is the world's largest consumer of copper by a wide margin. The move comes after Freeport-McMoRan stock slid significantly during the first half of the year as traders struggled to get behind the mining sector.

The company reported second quarter revenue that jumped 11.4% to $3.71 billion – beating consensus estimates by $40 million – while earnings per share of 17 cents missed estimates by four cents. Despite the mixed financial results, CEO Richard Adkerson expressed confidence in securing a new mining agreement in October for the Grasberg mine at a time when copper prices have been moving significantly higher. (See also: Freeport Stock Soars 15% on Copper Prices, Permit Progress.)

Technical chart showing the performance of Freeport McMoRan Inc. (FCX) stock

From a technical standpoint, the stock broke out from the 200-day moving average at $13.12 and R2/trendline resistance at $13.45 to fresh highs. The relative strength index (RSI) spiked to an overbought 81.00, but the moving average convergence divergence (MACD) continues to trend higher. While the breakout is certainly promising, traders may want to be careful when initiating long positions since the price action is highly dependent on copper prices.

Traders should watch for a further breakout from prior highs at around $16.00 and $17.00 to fresh highs. After the significant price jump, traders should also look out for some consolidation, with the R2 and trendline levels constituting a new key support level. Traders that remain bearish on the company should watch for a breakdown from the 200-day moving average toward the pivot point and 50-day moving average at around $12.00. (For additional reading, check out: Top 5 Copper Stocks for 2017.)

Charts courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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