Southern Copper Extends Slide 5.82% As Technical Support Nears Breakdown

Southern Copper (SCCO) declined 2.99% in the latest session, extending its losing streak to four consecutive days with a cumulative 5.82% drop. This downward momentum positions the stock near critical technical levels, warranting a multi-indicator assessment.
Candlestick Theory
Recent price action shows a cluster of bearish candles consolidating below the $104.00 resistance, confirmed by the July 9th long red candle closing at $99.92. A significant support zone emerges between $96.50 (June low) and $93.50 (April trough), while resistance is prominent at $104.00–$106.00, where multiple rallies have reversed. The four-day decline exhibits diminishing candle bodies, suggesting potential exhaustion near $99.00 support.
Moving Average Theory
The 50-day moving average crossed below the 100-day MA in late June, confirming a bearish trend shift. Current price trades under all three key MAs (50D, 100D, 200D), with the 200-day MA at $96.60 serving as a critical support. The expanding distance between the declining 50-day MA ($103.80) and 200-day MA indicates accelerating downside momentum, reflecting sustained selling pressure.
MACD & KDJ Indicators
MACD remains entrenched in negative territory with the histogram extending below its signal line, signaling persistent bearish momentum. KDJ oscillators align with this view, as the K-line (26) and D-line (32) are trending downward in oversold territory. However, the J-line (-10) exhibits a slight positive divergence from price – an early but unconfirmed signal that selling pressure may be overextended near $99.00 support.
Bollinger Bands
Bollinger Bands show pronounced expansion after the price broke below the lower band on July 9th, indicating elevated volatility and directional conviction in the downtrend. The breach of the lower band ($100.50) was not reclaimed, confirming bearish continuation. Narrowing bands in early July preceded this breakdown, reflecting the typical compression-before-expansion volatility pattern.
Volume-Price Relationship
Volume surged to 3.06 million shares on July 9th’s decline – the highest in three months – validating bearish momentum. However, the preceding three down days showed below-average volume, suggesting lackluster conviction until the capitulation event. Bullish reversals like the 7.79% surge on June 26th occurred on elevated volume (2.1 million shares), contrasting with recent bearish volume patterns.
Relative Strength Index (RSI)
The 14-day RSI reads 33, nearing oversold territory but not yet extreme. While the indicator has remained below 50 since mid-June, it established a minor bullish divergence in early July as price made lower lows while RSI formed a higher low – subsequently invalidated by the breakdown. Current readings suggest oversold conditions may develop if price tests $96.50.
Fibonacci Retracement
Applying Fibonacci to the April–July upswing ($75.63–$109.40) reveals critical thresholds. The 61.8% retracement at $88.50 aligns with the March consolidation zone. Currently, price hovers near the 38.2% level ($99.40), which overlaps with the 200-day MA. A breach below $99.40 opens the path to the 50% retracement at $92.50, a confluence zone with the April support and psychological $90.00 level.
Confluence & Divergence Observations
Confluence exists in the $96.50–$99.00 support region, where the 200-day MA, Fibonacci 38.2% retracement, and June swing low converge. A breakdown here would activate bearish targets near $92.50. Notably, KDJ’s J-line divergence and RSI’s proximity to oversold levels contrast with MACD’s entrenched bearish posture – a conflict suggesting near-term volatility but lacking reversal confirmation. Volume expansion on breakdowns versus contraction on rallies further underscores dominant selling pressure.