Southern Copper Surges 2.79% Amid Sector Turmoil: A Bullish Breakout or Fleeting Rally?

Summary
• Southern Copper (SCCO) rockets 3.29% intraday to $100.23, outperforming a -10.8% sector decline.
• Zacks.com highlights revised earnings estimates and a 3 Rank as key drivers of investor interest.
• Options activity intensifies, with SCCO20250815C97.5 and SCCO20250815C100 seeing high turnover and leverage ratios.

Today’s sharp rally in Southern Copper reflects a confluence of earnings optimism, sector rotation, and strategic options positioning. The stock’s 3.29% surge—its highest since June—has outpaced a struggling Mining - Non Ferrous sector, while technical indicators and options data suggest a pivotal moment for bulls.

Earnings Revisions and Sector Rotation Drive SCCO’s Rally
Southern Copper’s intraday surge is anchored in Zacks.com’s analysis of improving earnings estimates and a 3 Rank (Hold). The stock’s 2.2% 30-day revision in FY2025 earnings ($4.75) and 0.2% in FY2026 ($4.67) signal cautious optimism, despite a -11.3% Q2 forecast. This contrasts with the sector’s -10.8% decline, as investors rotate into SCCO’s relatively stronger fundamentals. Additionally, the Zacks Value Style Score (C) suggests fair valuation, balancing growth and affordability for momentum buyers.

Mining - Non Ferrous Sector Lags as SCCO Outperforms
The Mining - Non Ferrous sector, down 10.8% month-to-date, struggles amid copper price volatility and Trump-era tariff uncertainty. Southern Copper’s 3.29% gain today starkly outperforms sector peers like Freeport-McMoRan (FCX), which rose 2.88% on Q2 volume gains but faces tepid Q3 guidance. SCCO’s dividend hike to $0.80 and Zacks Rank 3 position it as a relative safe haven in a sector grappling with macroeconomic headwinds.

Options and ETFs Highlight Bullish Momentum
• MACD: -0.996 (bearish divergence), Signal Line: -0.801 (oversold), Histogram: -0.195 (negative momentum)
• RSI: 52.01 (neutral), Bollinger Bands: 102.57 (upper), 96.74 (middle), 90.90 (lower)
• 200D MA: 96.34 (below price), 30D MA: 98.89 (below price)

Technical indicators suggest SCCO is consolidating after a sharp rebound. The 200D MA at $96.34 and Bollinger Band upper bound at $102.57 define key resistance. For options, SCCO20250815C97.5 and SCCO20250815C100 stand out: both offer high leverage (23.85% and 48.98%) and moderate delta (0.69 and 0.55), with IV in mid-range (42.36% and 30.87%).

SCCO20250815C97.5 (Call, $97.5 strike, 8/15 expiry):
• IV: 42.36% (moderate)
• Leverage: 23.85% (high)
• Delta: 0.69 (moderate sensitivity)
• Theta: -0.249 (rapid time decay)
• Gamma: 0.056 (high sensitivity to price moves)
• Turnover: 6,001 (liquid)
• Payoff at 5% upside (105.76): $8.26/share. This contract benefits from SCCO’s short-term bullish momentum and high gamma, amplifying gains if the stock breaks above $97.5.

SCCO20250815C100 (Call, $100 strike, 8/15 expiry):
• IV: 30.87% (low)
• Leverage: 48.98% (very high)
• Delta: 0.55 (moderate sensitivity)
• Theta: -0.208 (rapid decay)
• Gamma: 0.086 (high sensitivity)
• Turnover: 14,361 (highly liquid)
• Payoff at 5% upside (105.76): $5.76/share. This contract offers explosive leverage for a breakout above $100, with high gamma to capitalize on volatility.

Aggressive bulls should prioritize SCCO20250815C100 into a close above $100.30.

Backtest Southern Copper Stock Performance
The 3-day win rate for SCCO after an intraday increase of at least 3% is 53.64%, with an average return of 0.40% over the same period. While this indicates a moderate probability of positive returns, the overall performance is modest, and the maximum return during the backtest was only 4.89% over 59 days. These results suggest that while there is some potential for gains following a strong intraday surge, the strategy's effectiveness is tempered by the relatively low maximum return and the fact that nearly half of the events resulted in no return at all.

Position for a Volatile Finish – Key Levels to Watch
Southern Copper’s 3.29% rally hinges on its ability to hold above the 200D MA ($96.34) and test the Bollinger Band upper bound ($102.57). A break above $100.30 could trigger a parabolic move, while a retest of $97.58 (intraday low) would validate bullish momentum. Sector leader Freeport-McMoRan (FCX, +2.88%) offers a benchmark for broader mining sentiment. Aggressive traders should target SCCO20250815C100 if $100.30 is breached.