Southern Copper Drops 4% As Technicals Signal Bearish Breakdown Below Key Support

Technical Analysis of Southern Copper (SCCO)
Southern Copper (SCCO) declined 3.98% in its most recent session, closing at $96.12, erasing gains from the preceding sessions. This sharp move warrants a detailed technical assessment using the provided data.
Candlestick Theory
Recent price action in SCCO culminated in a significant bearish candle on the latest close (Aug 11th), engulfing the prior session's small gains. This pattern near the $100-$101 resistance zone (recent highs on Aug 8th and July 10th) suggests strong selling pressure rejecting that level. Key near-term support is now established around $92.50-$93.50 (consolidation lows from early August and June), while resistance solidifies near $100-$101 and then more significantly at $103-$105 (the July peak area).
Moving Average Theory
The 50-day moving average (approximately $97.00 area based on the data) has recently crossed below the 100-day and 200-day averages (estimated near $97.50-$98.00 and $95.50-$96.50 respectively), signaling a deteriorating medium-term trend and reinforcing bearish sentiment in the short term. The current price trading below all three key moving averages (50, 100, 200) confirms the bearish posture, though proximity to the 200-day SMA suggests it may provide temporary support.
MACD & KDJ Indicators
The MACD line remains below its signal line and in negative territory, indicating persistent downward momentum. No strong bullish crossover is apparent yet. Concurrently, the KDJ lines (with K and D likely in the mid-30s and J potentially oversold) show the indicator approaching oversold conditions but without a definitive bullish crossover signal. This confluence suggests the downtrend remains intact, though the developing KDJ position warrants monitoring for potential short-term exhaustion near term.
Bollinger Bands
The bands have expanded significantly following the sharp Aug 11th drop, reflecting increasing volatility and directional momentum. Price closed near the lower Bollinger Band, which can sometimes suggest an oversold condition or signal continuation of the established downtrend. The expansion itself often precedes sustained directional moves; the close at the lower band leans bearish unless a recovery materializes swiftly.
Volume-Price Relationship
The recent down day (Aug 11th) occurred on notably higher volume relative to the preceding up days (Aug 7th & 8th). This expanding volume on the decline validates the selling pressure and increases the significance of the breakdown below $100. Historically, significant price moves in SCCO (like the declines in late July and March, or the surge in late June) have been accompanied by spikes in volume, confirming the strength of those moves. The current high-volume drop adds credence to the bearish move.
Relative Strength Index (RSI)
The RSI, calculated over the recent swing, has declined sharply and is estimated to be around 35. This moves SCCO out of the neutral zone (50) but remains above the oversold threshold (<30). It indicates weakening momentum but does not yet signal an oversold condition requiring imminent reversal. The downward trajectory of the RSI aligns with the current bearish price action, suggesting further weakness could materialize before reaching severely oversold territory.
Fibonacci Retracement
Applying Fibonacci to the most relevant recent swing (trough of $84.42 on Apr 9th to the peak of $105.54 on July 9th) yields key retracement levels. The 38.2% retracement sits near $97.12, a level the recent price failed to hold. The next significant support comes at the 50% ($94.98) and particularly the 61.8% ($93.05) Fibonacci levels. The 61.8% level converges closely with the 200-day moving average and previous swing lows near $93, creating a significant potential support zone ($93-$94). A breach below $93 would open the path towards the 78.6% retracement near $90.
Conclusion
SCCO's technical posture is bearish near-term, validated by the high-volume breakdown below key moving averages and the $100 psychological barrier. The confluence of price near the lower Bollinger Band, an RSI falling but not yet oversold, and bearish MACD/KDJ crossovers suggests downward momentum remains dominant. Key confluence support exists in the $93-$94 zone, combining the 61.8% Fibonacci retracement, the 200-day moving average, and prior consolidation lows. A decisive break below this $93-$94 support area would signal potential for a deeper correction towards $90. Probabilistically, while the indicators are not yet signaling oversold exhaustion on a longer timeframe, a consolidation or bounce attempt near the $93-$94 support confluence is plausible before further bearish continuation, given the Fibonacci and moving average confluence in that region. Resistance is expected to be formidable near $97.50-$98.00 (50-day MA) and $100-$101.