Southern Copper Surges 2.5% on Institutional Influx and Analyst Re-Rating – What’s Fueling the Bullish Momentum?

Summary
• Southern Copper (SCCO) trades at $98.88, up 2.53% intraday against a 52-week high of $118.64
• Institutional investors added 275,396 shares in Q1, with UBS and MIRAE Asset boosting holdings
• Copper futures hit $9,885/ton as Chinese imports surge and Trump tariffs loom
• Leveraged ETFs like COPX and COPP surge in tandem with SCCO’s momentum

Southern Copper’s sharp 2.53% intraday rally has ignited market speculation about copper’s structural demand and institutional conviction. The stock’s move follows a flurry of Q1 accumulation by top-tier investors, a split in analyst ratings, and sector-wide volatility driven by China’s import dynamics and Trump-era trade risks. With leveraged ETFs like COPX (+2.76%) amplifying copper’s tailwinds, SCCO’s technicals and options chain signal a high-stakes battleground for bulls and bears ahead of August’s tariff deadline.

Institutional Accumulation and Analyst Re-Rating Drive SCCO’s 2.64% Rally
Southern Copper’s 2.53% intraday surge is driven by a confluence of institutional buying and analyst re-ratings. UBS and MIRAE Asset added 78,769 and 10.7% stakes in Q1, while Morgan Stanley upgraded to $99 PT (from $86) and Itau BBA to 'Market Perform'. This counters downgrades from Hsbc and Wall Street Zen. The stock’s move aligns with a 15% jump in Chinese copper imports and a 5.86% year-to-date rally in copper prices, supported by China’s central bank rate cuts. Short-term optimism is fueled by leveraged ETFs like COPX and COPP, which surged 2.76% and 1.79%, respectively.

Materials Sector Volatility: FCX Leads as Copper-Related ETFs Surge
The Materials sector remains volatile, with Freeport-McMoRan (FCX) trading up 2.14% and trailing SCCO’s 2.53% move. Copper-focused ETFs like COPX (+2.76%) and ICOP (+2.30%) reflect renewed demand, while the Sprott Copper Miners ETF (COPP) rose 1.79%. SCCO’s 21.01 P/E ratio lags behind FCX’s 20.4 P/E, highlighting diverging investor sentiment between copper producers and broader materials stocks. Sector-wide optimism is evident as leveraged ETFs amplify exposure to copper’s structural demand.

Options Playbook: High-Leverage Calls and ETF Synergy in a Ranging Copper Market
• 30D MA: 98.77 (above), 200D MA: 97.69 (near), RSI: 35.26 (oversold)
• Bollinger Bands: 107.73 (upper), 92.56 (lower), MACD: 0.45 (bullish divergence)
• Short-term bearish trend, long-term ranging

Southern Copper’s technicals suggest a short-term rebound from oversold RSI levels, with the 30D MA at $98.77 acting as key support. The 200D MA at $97.69 and Bollinger lower band at $92.56 define a critical consolidation zone. Leveraged ETFs like COPX (+2.76%) and COPP (+1.79%) offer amplified exposure to copper demand tailwinds.

Top Options:
• SCCO20250815C97.5 (Call, Strike $97.50, Exp 8/15): IV 30.66%, Leverage 24.72%, Delta 0.5889, Theta -0.0919, Gamma 0.0479, Turnover 4,220
– IV: Moderate volatility; Leverage: Strong gearing; Delta: Mid-range sensitivity; Theta: Aggressive decay; Gamma: High sensitivity to price swings. Ideal for a 5% upside scenario, projecting $1.40 payoff (max(0, 103.94 - 97.50)).
• SCCO20250815C100 (Call, Strike $100, Exp 8/15): IV 29.10%, Leverage 38.03%, Delta 0.4630, Theta -0.0843, Gamma 0.0516, Turnover 16,485
– IV: Moderate volatility; Leverage: Balanced gearing; Delta: Mid-range sensitivity; Theta: High decay; Gamma: Strong response to price moves. Projected $3.94 payoff (max(0, 103.94 - 100)).

Aggressive bulls may consider SCCO20250815C97.5 into a breakout above $99.32 (intraday high). If $97.69 holds, COPX offers amplified exposure to copper’s structural demand.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a 3% intraday surge shows favorable short-to-medium-term gains, with win rates and returns increasing across 3, 10, and 30 days. The 3-Day win rate is 54.65%, the 10-Day win rate is 52.44%, and the 30-Day win rate is 56.54%. The maximum return during the backtest was 5.11%, which occurred on day 59, indicating that SCCO can continue to perform well in the immediate aftermath of a significant intraday increase.

Bullish Setup Confirmed: Target $103.94 as Copper’s Structural Tailwinds Align
Southern Copper’s 2.53% rally is underpinned by institutional buying, analyst upgrades, and copper’s technical strength. The stock’s 35.26 RSI at oversold levels and MACD divergence suggest a short-term rebound is likely. Watch for a breakout above $99.32 (intraday high) to validate the bullish case, with COPX’s 2.76% surge signaling sector-wide optimism. Freeport-McMoRan (FCX) trading up 2.14% reinforces copper’s momentum. Investors should target $103.94 (5% upside) and use SCCO20250815C97.5 for leveraged exposure if $97.69 (200D MA) holds. The key takeaway: Copper’s structural demand and SCCO’s technicals align for a near-term breakout.