Copper prices have been rising for several months and investors have been flocking to all things related to the industrial metal. There are several possible reasons for the rise in price, including dollar weakness, fears of inflation and even hopes of a strengthening economy. There are currently no ETFs physically backed by the metal, but there are a couple that track miners. Global X Copper Miners ETF (NYSE:COPX) and iPath DJ-UBS Copper (NYSE:JJC) are both trading near all-time highs and offer investors an alternative to trading an individual stock in this group.


However, looking to some of the individual names, there are many that have been showing incredible strength and could continue to rise with the metal. Freeport-McMoRan Copper & Gold, (NYSE:
FCX) for instance, has doubled in just the past five months. Over the past two years, FCX has actually rallied approximately 100 points from its December 2008 low of $15.70. Despite the incredible run in FCX, the stock is showing few signs of weakness. It recently cleared a small consolidation, and is trading near all-time highs. The $110 level should be watched as the most recent breakout level for support on any weakness. Looking above, traders should monitor just above $127 as a possible level of significant resistance. This level coincides with all-time highs, and is where FCX topped out in the last bull market.


Southern Copper Corporation (NYSE:SCCO ) is a copper stock already testing all-time highs. SCCO has also experienced a sharp rally from its summer lows and is currently in a consolidation between the $40 and $47.50 level. It already cleared a smaller channel it was following within the base and is now attempting to clear its base. SCCO already poked above the base; traders should watch to see if SCCO can hold above $47.50 in the near term.


Encore Wire Corporation (Nasdaq:WIRE) is a copper stock that is in the midst of a breakout. WIRE was late to the breakout party earlier this fall, as it continued to consolidate while its peers were rallying. However, it finally cleared stiff resistance near $22 and has followed through nicely. WIRE may be a little extended for traders looking to initiate a position, but it should be monitored as a possible candidate for buying on a pullback. (For more, see The Anatomy Of Trading Breakouts.)


Lihua International (Nasdaq:LIWA) is a Chinese copper stock showing an interesting pattern. LIWA cleared an important level near $9.50 in October and rallied into the $13 level in a few weeks. It has since been trading in a consolidation and is now attempting to break out of this pattern. Traders should monitor the $13 level, as LIWA has struggled with clearing this level in the past; a move above it would take LIWA to all-time highs.


Bottom Line
While the trend in copper stocks is well underway, they remain worth watching for traders, as copper may have room for even higher prices. If it continues on its trend, the miners should be the primary beneficiaries. Traders shouldn't chase stocks that are extended, but these stocks are definitely worth watching for possible buying opportunities. (For more, see Taking A Shine To Copper.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Joey Fundora did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Technical Indicators

    Explaining Autocorrelation

    Autocorrelation is the measure of an internal correlation with a given time series.
  2. Chart Advisor

    ChartAdvisor for October 9 2015

    Weekly technical summary of the major U.S. indexes.
  3. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  4. Investing Basics

    Top Tips for Diversifying with Exotic Currencies

    Is there an opportunity in exotic currencies right now, or are you safer sticking to the major ones?
  5. Mutual Funds & ETFs

    The 3 Biggest Mutual Fund Companies in the US

    Compare and contrast the rise of America's big three institutional asset managers: BlackRock Funds, The Vanguard Group and State Street Global Advisors.
  6. Chart Advisor

    These Oil & Gas Stocks Have Reversed

    It's been a long downtrend for oil stock owners, but there's hope. These four oil and gas stocks have reversed and may keep trending to the upside.
  7. Professionals

    5 Top-Rated Funds for Your Retirement Portfolio

    Mutual funds are a good choice for emotional investors. Here are five popular funds to consider.
  8. Mutual Funds & ETFs

    The 4 Best Buy-and-Hold ETFs

    Explore detailed analyses of the top buy-and-hold exchange traded funds, and learn about their characteristics, statistics and suitability.
  9. Chart Advisor

    Bumpy Roads Ahead In Transportation

    Investors are keeping an eye on the transportation industry. We'll take a look at the trend direction and how to trade it.
  10. Investing

    How ETFs May Save You Thousands

    Being vigilant about the amount you pay and what you get for is important, but adding ETFs into the investment mix fits well with a value-seeking nature.
  1. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  2. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  3. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
  4. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>
  5. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  6. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!