Freeport-McMoRan Surges 4% on Intraday Rally: What's Fueling the Momentum?

Summary
• Freeport-McMoRan (FCX) surges 4.07% to $56.43, breaking above its 52-week high of $57.12
• Copper prices near record highs and a class action lawsuit deadline loom
• Options chain shows extreme implied volatility (210%+), with 138K contracts traded on $40–$49 calls

Freeport-McMoRan’s intraday rally has ignited a frenzy in copper markets, with the stock trading at its highest level since 2023. The surge coincides with a critical January 12 deadline for class action lawsuits and a backdrop of soaring copper prices. With turnover at 14.27 million shares and RSI near overbought territory, the stock’s momentum demands urgent analysis.

Class Action Deadline and Copper Price Surge Drive Volatility
The 4.07% intraday surge in FCX is fueled by two conflicting forces: a looming class action lawsuit deadline and a bullish copper market. The lawsuit alleges safety failures at Freeport’s Indonesian mines, but copper prices near $5.65/lb (COMEX) and $4,330/oz (gold) are offsetting production concerns. The stock’s 56.43 price point—just 1.2% below its 52-week high—reflects a market betting on copper’s resilience despite the legal risks. The 71.68 RSI and 2.77 MACD histogram confirm short-term bullish momentum.

Copper Sector Gains Momentum as SCCO Leads Charge
Southern Copper (SCCO), the sector leader, has surged 5.58% today, outpacing FCX’s 4.07% gain. While both stocks benefit from copper’s $5.65/lb price, SCCO’s stronger performance suggests investor preference for lower-risk producers. Freeport’s Indonesian production challenges and legal risks create a divergence, but the sector’s collective 4.8% average gain underscores copper’s strategic importance in 2026.

High-Volatility Options and ETFs for Copper’s Bullish Bet
• 200-day MA: 41.89 (well below current price)
• RSI: 71.68 (overbought)
• MACD: 2.77 (bullish divergence)
• Bollinger Bands: 56.64 (upper), 50.76 (middle)

FCX’s technicals suggest a continuation of its bullish trend, with key resistance at $56.64 (Bollinger upper) and support at $50.76. The 71.68 RSI indicates overbought conditions, but the 2.77 MACD histogram and 0.23 MACD signal strong momentum. With copper prices near record highs, aggressive bulls should target a breakout above $56.64.

Top Options:
• FCX20260116C48: Call, $48 strike, 1/16/2026 expiry
- IV: 107.76% (extreme volatility)
- Leverage: 6.50% (high)
- Delta: 0.858 (high sensitivity)
- Theta: -0.265 (rapid time decay)
- Gamma: 0.025 (price-sensitive)
- Turnover: 23,684 (liquid)
- Payoff at 5% upside: $1.16/share
- Why: High leverage and liquidity make this ideal for a short-term breakout play.

• FCX20260116C49: Call, $49 strike, 1/16/2026 expiry
- IV: 94.94% (extreme)
- Leverage: 7.41% (high)
- Delta: 0.853 (high)
- Theta: -0.257 (rapid decay)
- Gamma: 0.029 (price-sensitive)
- Turnover: 18,341 (liquid)
- Payoff at 5% upside: $1.34/share
- Why: Slightly out-of-the-money but offers higher reward potential with manageable risk.

Action: Aggressive bulls should buy FCX20260116C48 into a breakout above $56.64. Conservative traders may consider a diagonal spread with the 1/16/2026 $48 call and 1/30/2026 $50 call to hedge time decay.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a 4% intraday increase from 2022 to now shows mixed results. The event occurred 492 times over the period, with a 3-day win rate of 51.42%, a 10-day win rate of 53.66%, and a 30-day win rate of 53.25%. The maximum return observed was 1.80% over 35 days, indicating that while there was a decent probability of positive returns in the short term, the overall performance was modest.

Breakout or Correction? Here's What to Watch Now
FCX’s 4.07% rally hinges on two critical factors: copper prices holding above $5.60/lb and the class action lawsuit not spiking volatility. The 71.68 RSI and 2.77 MACD suggest momentum is intact, but a close below $54.57 (intraday low) would trigger a retest of the 200-day MA at $41.89. Investors should monitor SCCO’s 5.58% surge as a sector barometer. Act now: Buy FCX20260116C48 for a 5% upside target or short the 1/16/2026 $48.5 put (FCX20260116P48.5) if the stock fails to break $56.64.