Southern Copper (SCCO) Surges 2.8% on Intraday Rally: What’s Fueling the Momentum?

Summary
• Southern Copper (SCCO) trades at $175.37, up 2.84% from its $170.52 previous close.
• Intraday high hits $177.06, matching its 52-week peak, while volume surges 1.33% turnover.
• Earnings revisions for Q4 2025 have risen 17.2% in 30 days, outpacing sector peers.
• Copper prices near $6/lb, up 39.2% year-to-date, while China’s policy easing fuels demand.
• Sector leader Freeport-McMoRan (FCX) gains 3.23%, signaling broader non-ferrous metals strength.

Southern Copper’s intraday rally reflects a confluence of macroeconomic tailwinds and sector-specific optimism. With copper prices at record highs and earnings estimates surging, SCCO’s breakout above key resistance levels has ignited short-term bullish momentum. Traders are now weighing whether this surge is a sustainable trend or a volatile correction.

Copper Price Surge and Earnings Optimism Drive SCCO’s Rally
Southern Copper’s 2.84% intraday gain is directly tied to a 39.2% annual surge in copper prices, which hit $6/lb amid tightening supply and China’s policy easing. The stock also benefits from a 17.2% upward revision in Q4 2025 earnings estimates over 30 days, signaling strong operational performance. Analysts highlight SCCO’s 30.1% revenue growth and 44.6% EPS increase as catalysts, while unusually large options activity (19,229 put options traded) suggests positioning for further volatility.

Non-Ferrous Metals Sector Gains Momentum as FCX Leads Charge
The non-ferrous metals sector is rallying on global copper demand and policy-driven optimism. Freeport-McMoRan (FCX) leads with a 3.23% intraday gain, outpacing SCCO’s 2.84% move. Sector news highlights Yunnan’s new National Nonferrous Metal Quality Inspection Center, which could boost supply chain efficiency. While SCCO’s rally is copper-specific, FCX’s broader exposure to energy transition metals (e.g., cobalt, gold) adds diversification, making it a key benchmark for sector strength.

Options Playbook: High-Leverage Calls and Strategic Puts for SCCO’s Volatile Move
• MACD: 6.46 (above signal line 4.64), RSI: 81.6 (overbought), Bollinger Upper: $164.75 (below current price), 200D MA: $110.82 (far below).
• Key Levels: 52W high at $177.06 (broken), next target at $185 (RSI divergence suggests caution).
• Options Chain Highlights:
- SCCO20260116C180 (Call, $180 strike, 1/16 expiry):
• IV: 45.50% (moderate), Leverage: 91.34%, Delta: 0.3239, Theta: -0.592, Gamma: 0.0385, Turnover: $44,863.
• Payoff: At 5% upside ($184.14), profit = $4.14/share. High leverage and gamma make this ideal for aggressive bulls.
- SCCO20260220C175 (Call, $175 strike, 2/20 expiry):
• IV: 42.01% (moderate), Leverage: 17.36%, Delta: 0.5402, Theta: -0.167, Gamma: 0.0162, Turnover: $65,224.
• Payoff: At 5% upside ($184.14), profit = $9.14/share. Balanced delta/gamma for directional bets.
• Action: Aggressive bulls may consider SCCO20260116C180 for high leverage, while SCCO20260220C175 offers a safer, mid-term play. Watch for a break above $180 to validate the breakout.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a 3% intraday increase from 2022 to the present shows favorable results. The 3-day win rate is 53.85%, the 10-day win rate is 53.65%, and the 30-day win rate is 58.27%, indicating that the stock tends to experience positive returns in the short term following the intraday surge. The maximum return during the backtest period was 5.89%, which occurred on day 59 after the surge, suggesting that there is potential for significant gains if the positive momentum continues.

Bullish Setup Confirmed: Southern Copper’s Breakout Demands Immediate Attention
Southern Copper’s 2.84% intraday surge, coupled with a 39.2% annual copper price rally and 17.2% earnings revision, signals a strong near-term bullish case. The stock’s breakout above its 52-week high of $177.06 and overbought RSI (81.6) suggest momentum is intact, though caution is warranted. Sector leader Freeport-McMoRan’s 3.23% gain reinforces the non-ferrous metals rally. Traders should monitor SCCO20260116C180 for aggressive upside or SCCO20260220C175 for a balanced approach. Watch for a close above $180 to confirm the trend.