Southern Copper Surges 4.2% on Bullish Momentum – What’s Fueling the Rally?

Summary
• Southern Copper (SCCO) rockets 4.2% to $154.96, hitting its 52-week high of $155.78
• Sector leader Freeport-McMoRan (FCX) gains 3.9%, signaling copper sector strength
• Options frenzy: 2026-01-16 $155 call (SCCO20260116C155) sees 113,502 turnover, 206.82% price surge

SCCO’s intraday rally defies muted macroeconomic headlines, driven by a confluence of technical momentum and sector-wide optimism. With the stock breaching key resistance levels and options volatility spiking, traders are scrambling to position for a potential continuation of the bullish trend. The 52-week high at $155.78 looms as a critical psychological threshold.

Copper Sector Rally Drives SCCO Higher Amid Commodity Strength
SCCO’s 4.2% surge aligns with a broader commodities rebound, fueled by speculative positioning in copper ETFs and renewed demand from green energy sectors. While no company-specific news triggered the move, the stock’s performance mirrors the sector leader Freeport-McMoRan’s 3.9% gain. Technical indicators confirm a short-term bullish trend, with SCCO trading above its 30D ($139.48), 100D ($124.42), and 200D ($109.30) moving averages. The RSI at 51.7 and MACD (-0.17) suggest momentum is intact but not overbought, leaving room for further upside.

Copper Sector Synchronizes – SCCO Outpaces FCX on Technical Breakouts
SCCO’s 4.2% gain outperformed sector leader FCX’s 3.9% rally, reflecting stronger technical conviction in the stock. The copper sector’s broader strength is evident in ETF flows and speculative positioning, though no direct catalysts were reported. SCCO’s proximity to its 52-week high and its breakout above the 30D moving average ($139.48) position it as a momentum play within the sector’s upward trajectory.

Options Volatility Spikes – Two High-Leverage Calls for Aggressive Bulls
• 200-day average: $109.30 (well above) • RSI: 51.7 (neutral) • MACD: -0.17 (bullish divergence) • Bollinger Bands: $137.86–$150.49 (SCCO at $154.96, above upper band)

SCCO’s technical setup favors aggressive longs targeting a test of the 52-week high. The stock’s 4.2% surge has triggered a surge in call options, particularly the SCCO20260116C155 and SCCO20260116C160 contracts. These options offer high leverage and liquidity, ideal for capitalizing on a potential continuation of the bullish trend.

SCCO20260116C155 (Call, $155 strike, 2026-01-16):
• IV: 37.27% (moderate) • Leverage: 38.19% • Delta: 0.50 • Theta: -0.299 • Gamma: 0.038 • Turnover: 113,502
• IV suggests balanced volatility expectations; leverage amplifies gains if SCCO closes above $155
• Delta of 0.50 indicates 50% sensitivity to price moves; high gamma (0.038) ensures rapid delta acceleration
• Projected 5% upside (to $162.71) yields a payoff of $7.71 per contract, or 154% return on the $5.00 premium

SCCO20260116C160 (Call, $160 strike, 2026-01-16):
• IV: 37.04% • Leverage: 73.64% • Delta: 0.32 • Theta: -0.237 • Gamma: 0.034 • Turnover: 19,858
• High leverage (73.64%) magnifies returns for aggressive bulls; moderate delta (0.32) balances risk
• Theta of -0.237 indicates time decay is manageable for a 10-day expiry; gamma of 0.034 ensures responsiveness to price swings
• 5% upside (to $162.71) yields a $2.71 payoff, or 144% return on the $1.88 premium

Aggressive bulls should target SCCO20260116C155 into a close above $155. The contract’s high leverage and liquidity make it ideal for a short-term breakout play. For a more conservative approach, SCCO20260116C160 offers asymmetric upside with lower delta exposure.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a 4% intraday increase from 2022 to now shows favorable results. The 3-Day win rate is 54.28%, the 10-Day win rate is 53.89%, and the 30-Day win rate is 58.75%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 5.86% over 30 days, suggesting that SCCO can deliver decent gains even after the initial surge.

Bullish Setup Confirmed – Position for Next Move as SCCO Tests 52W High
SCCO’s 4.2% rally has validated a short-term bullish breakout, with technical indicators and options flows aligning for a continuation. The 52-week high at $155.78 and the 30D moving average ($139.48) now act as dynamic support levels. Sector leader FCX’s 3.9% gain reinforces the copper sector’s strength, but SCCO’s outperformance suggests stronger speculative positioning. Traders should monitor the $155.78 level for a potential breakout confirmation and consider the SCCO20260116C155 call for a high-leverage play. A close above $155.78 would signal a shift in sentiment, warranting immediate action.