Freeport-McMoRan Plummets 4%—Is This the Bottom or a Copper Crisis?

• FCX shares crash 3.6% intraday to $43.91, hitting a 52-week low near $27.66 support.
• Metals & Mining sector slumps as BHP Group slides -2.86%, dragging COPP ETF down 1.84%.
• Technicals show RSI at 67.28 (overbought reversal) with price near Bollinger Band lower limit $39.22.

The selloff marks a critical test of Freeport-McMoRan's technical underpinnings amid weakening copper demand signals and sector-wide declines.

Zacks Hold Rating and Sector Weakness Weigh on FCX
The 3.6% intraday plunge stems from three key factors: Zacks' #3 Hold rating signaling cautious sentiment despite strong VGM Score A, broader Metals & Mining sector weakness led by BHP's -2.86% decline, and deteriorating copper demand fundamentals. Analysts' revised 2025 earnings estimates failed to offset macroeconomic concerns, with traders accelerating profit-taking as RSI reversed from overbought conditions. The stock's proximity to its 52-week low underscores investor skepticism toward near-term copper price resilience.

Metals & Mining Sector Struggles as BHP Leads Lower
FCX's decline mirrors sector-wide underperformance, with BHP Group's -2.86% drop and Sprott Copper Miners ETF (COPP) falling 1.84% reflecting broader commodity pessimism. Unlike sector leaders like BHP, FCX's North America copper exposure amplifies volatility during manufacturing downturns. The iShares U.S. Basic Materials ETF (IYM) dropping 1.56% further highlights investor skepticism toward commodity-linked equities.

Bullish Puts and COPP Shorts Target Copper Correction
Bollinger Bands: Lower band at $39.22 offers critical support.
RST: 67.28 (overbought reversal).
200-day MA: $40.88 (key pivot).

Aggressive traders should focus on FCX20250725P41.5 and FCX20250725P42. Both contracts exhibit:
- 45-47% implied volatility (ideal for volatility-driven gains).
- Leverage ratios of 95.4% and 68.6%, with deltas of -0.22 and -0.28.
- Theta decay of -$0.017/day and gamma sensitivity of 0.086/0.093.

In a 5% downside scenario ($41.74), FCX20250725P41.5 yields $0.76 intrinsic value while FCX20250725P42 gains $0.26. Pair with short positions in COPP (target $22.50 support).

Hook: Layer into FCX20250725P41.5 below $41.10 support; COPP shorts could amplify sector exposure.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a -4% intraday plunge shows mixed results. While the 3-day win rate is 50%, the 10-day win rate is 46.25%, and the 30-day win rate is 46.56%, indicating a higher probability of positive returns in the short term. However, the maximum return during the backtest period was only 0.25%, which suggests that while there is a chance of recovery, the potential upside is limited.

Hold Until Copper Demand Clarity—Watch $40.92 Support
FCX faces a critical juncture below $40.92 support, where a breakdown could trigger a freefall to $38.80. Bulls require a rebound above $44.36 resistance to revive Zacks' 'Outperform' narrative. With BHP's -2.86% performance amplifying sector malaise, traders should prioritize downside protection via puts while monitoring copper fundamentals. The $40.92 level is the make-or-break point—hold until clarity emerges on global manufacturing trends and Chinese demand recovery.