Freeport-McMoRan Surges 4% to 52-Week High Amid Legal Storm and Copper Rally

Summary
• FCX hits $58.825 intraday high, up 4.01% from $56.53 close
• 52-week range spans $27.66 to $58.825
• Class-action lawsuit over safety practices at Grasberg mine
• Copper prices near record highs on AI-driven demand and supply tightness

Freeport-McMoRan’s stock is trading at its highest level in a year as copper prices surge amid AI infrastructure demand and geopolitical supply risks. Despite a pending class-action lawsuit over safety failures at its Indonesian mine, FCX’s shares have rallied on strong earnings, analyst upgrades, and a bullish commodities backdrop. The stock’s 4% intraday gain reflects a mix of sector momentum and speculative positioning.

Copper’s Green Revolution and Legal Headwinds Collide
FCX’s rally is fueled by a 1.75% surge in copper prices to $5.96/lb, driven by AI infrastructure demand and U.S. tariff concerns. Analysts at ClearBridge and Hsbc Global raised price targets, while earnings beat expectations by 21.5% in Q3. However, a class-action lawsuit alleging safety negligence at the Grasberg mine—FCX’s largest asset—introduces near-term volatility. The stock’s 52-week high aligns with a 38.5% annual copper price increase, as investors balance long-term electrification demand against operational risks.

Copper Sector Soars on AI and Green Energy Tailwinds
The Copper sector is outperforming, with Southern Copper (SCCO) up 3.5% and Ero Copper (ERO) gaining 5.98%. FCX’s 4% move mirrors the sector’s 11.34% monthly rally, driven by AI-driven copper demand and U.S. policy tailwinds. While SCCO leads with stronger liquidity, FCX’s scale and diversified operations position it to benefit from long-term structural demand.

Bullish Setup: ETFs and Options for Copper’s Green Surge
• RSI: 75.37 (overbought)
• MACD: 2.87 (bullish divergence)
• 200-day MA: $41.96 (well below current price)
• Bollinger Bands: Price at upper band ($57.32), suggesting overextension

FCX’s technicals signal a short-term overbought condition but remain within a long-term bullish trend. Key support at $47.33 (30D support) and resistance at $58.83 (52W high) define the near-term range. A breakout above $58.83 could target $60.80 (200-day MA + 2σ).

Top Options:
• FCX20260116C59
- Type: Call
- Strike: $59
- Expiry: 2026-01-16
- IV: 40.26% (moderate)
- Leverage: 58.76% (high)
- Delta: 0.4777 (moderate sensitivity)
- Theta: -0.2773 (rapid time decay)
- Gamma: 0.1438 (high sensitivity to price moves)
- Turnover: 82,149
- Payoff: At 5% upside ($61.74), payoff = $2.74/share. This call offers high leverage with moderate delta, ideal for a short-term bullish bet.

• FCX20260116C58
- Type: Call
- Strike: $58
- Expiry: 2026-0116
- IV: 39.86% (moderate)
- Leverage: 38.65% (high)
- Delta: 0.6215 (strong directional bias)
- Theta: -0.3197 (aggressive time decay)
- Gamma: 0.1387 (high sensitivity)
- Turnover: 237,234
- Payoff: At 5% upside, payoff = $3.74/share. This contract balances leverage and liquidity, suitable for a breakout play.

Aggressive bulls should consider FCX20260116C59 into a test of $58.83 resistance. If FCX closes above $59 by expiry, the 58.76% leverage could amplify gains. For a more conservative approach, FCX20260116C58 offers a safer entry with a 38.65% leverage ratio.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after an intraday surge of at least 4% from 2022 to the present shows mixed results. While the 3-day win rate is 51.32%, the 10-day win rate is slightly higher at 53.55%, and the 30-day win rate is 53.14%, indicating a moderate probability of positive returns in the short term. However, the maximum return during the backtest period was only 1.80%, which suggests that even though there is a decent chance of positive returns, the overall performance after such a surge is generally muted.

Copper’s Green Surge: Hold the 52-Week High or Exit on Legal Fallout
FCX’s 4% rally to a 52-week high is a testament to copper’s critical role in AI and green energy transitions, but the class-action lawsuit over Grasberg safety practices remains a near-term risk. Investors should monitor the $58.83 level—holding above this could confirm a breakout to $60.80, while a breakdown may trigger a retest of $47.33 support. Meanwhile, SCCO’s 3.5% gain underscores sector strength. Aggressive bulls may consider FCX20260116C59 if the stock holds above $58.83; otherwise, tighten stops below $57.16 to mitigate legal uncertainty.