Southern Copper Surges 2.64%: Institutional Buying and Analyst Shifts Fuel Rally Amid Copper Sector Volatility

Summary
• Southern Copper (SCCO) trades at $98.99, up 2.64% against a 52-week high of $118.64
• Institutional investors added 275,396 shares in Q1, with UBS and MIRAE Asset boosting holdings
• Analysts split: Morgan Stanley upgraded to $99 PT, while Louis Navellier downgraded to 'Strong Sell'
• Copper futures hit $9,885/ton as Chinese imports surge and Trump tariffs loom

Traders are racing to decode Southern Copper’s sharp 2.64% intraday rally amid a mixed analyst landscape and sector-wide copper volatility. The stock’s move follows a flurry of institutional buying and a strategic shift in analyst ratings, with leveraged ETFs like COPX and COPP surging in tandem. As the market weighs Trump-era trade risks and China’s shifting scrap dynamics, SCCO’s technicals and options chain reveal a high-stakes battleground for bulls and bears.

Institutional Accumulation and Analyst Re-Rating Drive SCCO’s 2.64% Rally
Southern Copper’s 2.64% surge stems from a confluence of institutional buying and analyst re-ratings. Jennison Associates and UBS added 275,396 and 78,769 shares respectively in Q1, while MIRAE Asset’s 10.7% stake boost underscores long-term conviction. Meanwhile, Morgan Stanley upgraded to $99 PT (from $86) and Itau BBA upgraded to 'Market Perform', countering downgrades from Hsbc and Wall Street Zen. The stock’s 2.64% move—its highest since March—aligns with a 15% jump in Chinese copper imports and a 5.86% year-to-date rally in copper prices, which found support after China’s central bank cut lending rates.

Materials Sector Volatility: FCX Leads as Copper-Related ETFs Surge
The Materials sector remains volatile as Freeport-McMoRan (FCX) trades up 2.49%, outpacing SCCO’s 2.64% move. Copper-focused ETFs like COPX (+3.05%) and ICOP (+2.25%) reflect renewed demand, with COPX’s 3.05% gain matching SCCO’s momentum. The Sprott Copper Miners ETF (COPP) also rose 2.48%, signaling sector-wide optimism. However, SCCO’s 21.04 P/E ratio lags behind FCX’s 20.4 P/E, highlighting diverging investor sentiment between copper producers and broader materials stocks.

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 acting as a key support. The 200D MA at $97.69 and Bollinger lower band at $92.56 define a critical consolidation zone. Leveraged ETFs like COPX (3.05% up) and COPP (2.48% up) offer amplified exposure to copper demand tailwinds.

Top Options:
• SCCO20250815C97.5: Call, Strike $97.50, Exp 8/15, IV 22.44%, Leverage 30.92%, Delta 0.615, Theta -0.078, Gamma 0.0643, Turnover 4,220
– IV: Low volatility; Leverage: High gearing; Delta: Sensitive to price moves; 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 30.74%, Leverage 35.34%, Delta 0.4696, Theta -0.0878, Gamma 0.0489, Turnover 14,927
– 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)).

Action: 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% over 30 days, indicating the strategy's effectiveness in capturing short-term price appreciation.

Bullish Setup Confirmed: Target $103.94 as Copper’s Structural Tailwinds Align
Southern Copper’s 2.64% 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 3.05% surge signaling sector-wide optimism. Freeport-McMoRan (FCX) trading up 2.49% 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.