Southern Copper Plunges 2.46% Amid Copper Sector Turbulence – What’s Fueling the Selloff?

Summary
• Southern Copper (SCCO) trades at $95.375, down 2.46% from its previous close of $97.78
• Intraday range spans $95.03 to $97.00, signaling heightened volatility
• Freeport-McMoRan (FCX), sector leader, declines 0.98%, hinting at broader copper sector pressure

Today’s sharp selloff in SCCO has traders scrambling to decipher the catalyst. With the stock trading below its 200-day moving average and key technical indicators flashing caution, the move appears tied to sector-wide profit-taking and macroeconomic jitters. The copper complex faces a critical juncture as SCCO’s 52-week range narrows, raising questions about near-term support levels and options positioning.

Technical Divergence and Short-Term Profit-Taking Drive SCCO’s Decline
The 2.46% drop in SCCO reflects a confluence of technical exhaustion and sector-wide profit-taking. The stock’s failure to hold above its 30-day moving average ($96.43) and the 200-day line ($95.27) has triggered algorithmic selling pressure. Meanwhile, the MACD (-0.229) crossing below its signal line (-0.413) confirms bearish momentum. With RSI at 55.8, the stock is teetering on the edge of oversold territory, suggesting short-term traders are capitalizing on the pullback. The absence of company-specific news points to broader copper sector dynamics and macroeconomic concerns.

Copper Sector Volatility Intensifies as FCX Trails Behind SCCO’s Slide
The copper sector’s mixed performance underscores SCCO’s pronounced weakness. While Freeport-McMoRan (FCX) has fallen 0.98%, SCCO’s 2.46% drop dwarfs its peer’s decline, indicating sector-specific selling pressure. This divergence suggests SCCO’s technical breakdown is amplifying broader copper market jitters. The sector’s 52-week range (73.37–117.46) remains intact, but SCCO’s proximity to its 52-week low ($73.37) raises concerns about a potential breakdown in the copper complex’s near-term momentum.

Options Playbook: Capitalizing on SCCO’s Volatility with Strategic Puts
• 30D Moving Average: $96.43 (below current price)
• 200D Moving Average: $95.27 (near-term support)
• RSI: 55.8 (neutral to bearish)
• MACD: -0.229 (bearish crossover)
• Bollinger Bands: $90.65–$100.74 (current price near lower band)

SCCO’s technical profile favors a short-term bearish bias, with key support at $93.05 (200D range) and resistance at $96.50 (30D range). The stock’s proximity to its 52-week low and bearish MACD crossover suggest a test of $90.65 is likely. Options positioning reveals aggressive bearish sentiment, with the SCCO20250919P95 and SCCO20250919P97.5 contracts standing out for their high leverage and liquidity.

• SCCO20250919P95 (Put): Strike $95, Expiry 2025-09-19, IV 30.50%, Leverage 35.08%, Delta -0.457, Theta -0.0317, Gamma 0.0530, Turnover 1363
- IV: Moderate volatility, Delta: Strong sensitivity to price drops, Gamma: High sensitivity to price movement
- This contract offers a 35% leverage ratio with decent liquidity (1363 turnover), making it ideal for a 5% downside scenario. Projected payoff: $0.375 per share if SCCO drops to $90.65.

• SCCO20250919P97.5 (Put): Strike $97.5, Expiry 2025-09-19, IV 25.17%, Leverage 26.50%, Delta -0.612, Theta -0.0091, Gamma 0.0620, Turnover 720
- IV: Lower volatility, Delta: High sensitivity to price drops, Gamma: Exceptional sensitivity to movement
- The -0.612 delta and 0.062 gamma suggest this put could accelerate in value if SCCO breaks below $95.03. Projected payoff: $2.475 per share under a 5% downside.

If $93.05 breaks, SCCO20250919P95 offers short-side potential. Aggressive bears may consider SCCO20250919P97.5 into a breakdown below $95.03.

Backtest Southern Copper Stock Performance
After an intraday plunge of -2%, the stock SCCO has historically shown positive short-to-medium-term gains. The 3-Day win rate is 55.18%, the 10-Day win rate is 54.68%, and the 30-Day win rate is 55.02%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return observed was 5.62% over 30 days, suggesting that SCCO can experience meaningful rebounds even after significant intraday declines.

Southern Copper at Pivotal Crossroads – Immediate Action Required as Support Levels Test
SCCO’s 2.46% decline has positioned it at a critical juncture, with the 200-day support ($93.05) and 52-week low ($73.37) looming as key decision points. The bearish technical setup, amplified by options positioning, suggests further downside is likely if the stock fails to reclaim $96.50. Sector leader FCX’s 0.98% drop reinforces the copper complex’s fragility. Investors should monitor SCCO’s ability to hold above $93.05—break below this level could trigger a cascade into the lower Bollinger Band. Aggressive bears may consider SCCO20250919P95 if the stock breaks below $93.05.