Freeport-McMoRan Surges 3.06% Amid Copper Rally and Earnings Optimism—What’s Fueling the Momentum?

Summary
• Freeport-McMoRan (FCX) surges 3.06% to $42.05, hitting an intraday high of $42.175
• Copper prices rebound 0.59% as global supply concerns resurface
• Options chain shows heavy call buying at $42.5 strike ahead of August 15 expiration

Freeport-McMoRan’s sharp intraday rally has outpaced broader market gains, with the stock trading near a 52-week high amid renewed optimism in the copper sector. The move coincides with a 3.199% surge in sector leader Southern Copper (SCCO) and a 0.59% rebound in benchmark copper futures. With technical indicators flashing mixed signals and options activity pointing to aggressive bullish positioning, traders are weighing whether this breakout signals a sustainable trend or a short-lived countertrend.

Copper Supply Tightness and Earnings Optimism Drive FCX’s Rally
Freeport-McMoRan’s intraday surge aligns with a broader rebound in copper prices, which rose 0.59% to $4.44/lb on August 4, 2025. The move follows a 30% plunge in copper prices after U.S. President Donald Trump’s tariff announcement, which excluded key copper imports like cathodes and concentrates. This has reignited demand for physical copper, with China’s Yangshan premium halving since May. Meanwhile, FCX’s Q2 earnings beat—$0.54/share vs. $0.45 consensus—highlighted 14.5% revenue growth and a 7.45% net margin, outperforming peers like Teck Resources and BHP. Analysts at Morgan Stanley upgraded FCX to 'overweight' with a $54 price target, citing its low-cost production and exposure to green transition metals.

Copper Sector Mixed as Southern Copper (SCCO) Leads Gainers
The copper sector remains fragmented, with Southern Copper (SCCO) surging 3.199% to $100.64, outpacing Freeport-McMoRan’s 3.03% gain. SCCO’s strength stems from its 14% year-over-year copper sales growth and lower production costs in Mexico. In contrast, peers like Hudbay Minerals (HBM) and Lundin Mining (LUN.TO) lagged, with HBM up 2.77% and LUN.TO up 1.34%. The sector’s divergence reflects divergent operational efficiencies and exposure to U.S. tariffs. Freeport-McMoRan’s 3.03% gain, while robust, underscores its role as a bellwether for global copper demand amid green energy transitions.

Options and ETFs to Capitalize on FCX’s Bullish Momentum
• 200-day MA: $40.27 (below current price)
• RSI: 32.58 (oversold)
• MACD: -0.89 (bearish), Signal Line: -0.37
• Bollinger Bands: $38.30–$47.92 (range-bound)

Freeport-McMoRan’s technical profile suggests a short-term consolidation phase after its 3.03% rally. The RSI at 32.58 indicates oversold conditions, while the MACD histogram (-0.52) signals weakening bearish momentum. Key support lies at the 200-day MA ($40.27) and lower Bollinger Band ($38.30), with resistance at the 30-day MA ($43.79) and upper Bollinger Band ($47.92).

Top Options Picks:
• FCX20250815C42
- Type: Call
- Strike: $42.00
- Expiry: 2025-08-15
- IV: 33.89% (moderate)
- LVR: 49.41% (high leverage)
- Delta: 0.51 (moderate sensitivity)
- Theta: -0.1217 (high time decay)
- Gamma: 0.1892 (high sensitivity to price moves)
- Turnover: 228,909 (liquid)
- Why: This call offers high leverage (49.41%) and gamma (0.1892), ideal for a 5% upside scenario. Projected payoff: $42.035 → $44.14 (5% gain) → max(0, $44.14 - $42.00) = $2.14/share. With 228k turnover, liquidity is robust.
• FCX20250815C42.5
- Type: Call
- Strike: $42.50
- Expiry: 2025-08-15
- IV: 32.78% (moderate)
- LVR: 69.99% (high leverage)
- Delta: 0.41 (moderate sensitivity)
- Theta: -0.1063 (high time decay)
- Gamma: 0.1914 (high sensitivity to price moves)
- Turnover: 114,703 (liquid)
- Why: This call provides the highest leverage (69.99%) and gamma (0.1914) among active contracts. Projected payoff: $42.035 → $44.14 → max(0, $44.14 - $42.50) = $1.64/share. High liquidity (114k turnover) ensures easy entry/exit.

Action: Aggressive bulls should prioritize FCX20250815C42.5 for its 69.99% leverage and 0.1914 gamma, targeting a $44.14 price level. Conservative traders may use FCX20250815C42 as a lower-risk play with 49.41% leverage.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after an intraday surge of at least 3% indicates positive short-to-medium-term gains, with higher win rates and returns over 3, 10, and 30 days. This suggests that following such intraday momentum can be a profitable strategy for FCX, outperforming the broader market trend.

FCX’s Rally Faces Crucial Test—Here’s What to Watch
Freeport-McMoRan’s 3.03% rally has positioned it near key technical resistance at $43.79 (30-day MA) and $47.92 (Bollinger Band). Sustaining above $42.00 will validate the breakout, while a retest of $40.27 (200-day MA) could reignite bearish momentum. Sector leader Southern Copper (SCCO) surging 3.199% to $100.64 suggests copper demand remains resilient, but global supply chain disruptions—like Codelco’s mine closure—add volatility. Traders should monitor FCX’s options activity, particularly the $42.5 strike, as a barometer of market sentiment. A close above $43.79 would signal a shift to higher conviction bullish positioning, while a breakdown below $40.27 could trigger a reevaluation of the green transition thesis.