Southern Copper Surges to 52-Week High on Bullish Momentum: What’s Fueling the Rally?

Summary
• Southern Copper (SCCO) rockets 3.3% intraday, hitting $161.59—the 52-week high.
• Freeport-McMoRan (FCX), sector leader, gains 2.47%, trailing SCCO’s momentum.
• Technical indicators align with a bullish setup: MACD above signal line, RSI at 68.9, and price above all major moving averages.
• Turnover spikes to 983,671 shares, signaling strong institutional participation.

SCCO’s explosive move reflects a confluence of technical strength and sector-wide optimism. With copper fundamentals tightening and leveraged options chains heating up, traders are scrambling to position for a potential breakout. The stock’s surge to the 52-week high raises critical questions: Is this a short-term spike or the start of a new uptrend?

Technical Bullishness Drives SCCO Higher as Momentum Metrics Align
SCCO’s 3.3% intraday gain is fueled by a textbook technical breakout. The stock pierced above the 30-day moving average ($140.45) and the 200-day line ($109.57), confirming a long-term bullish trend. MACD (3.69) remains above the signal line (3.44), while the RSI (68.9) suggests momentum remains intact without overbought conditions. Price action also aligns with the 52-week high ($161.59), creating a self-fulfilling prophecy as algorithmic and institutional buyers target this level. The absence of company or sector news shifts focus to pure technical execution.

Copper Sector Gains Steam as Freeport-McMoRan Trails SCCO’s Rally
While SCCO leads the charge, the broader copper sector remains in a constructive phase. Freeport-McMoRan (FCX), the sector’s bellwether, rose 2.47% but trails SCCO’s vigor. This divergence highlights SCCO’s unique technical setup, as its price action aligns with key moving averages and the 52-week high. However, FCX’s participation suggests underlying sector strength, with copper fundamentals—tightening supply chains and green energy demand—providing a tailwind for both names.

Capitalizing on SCCO’s Breakout: High-Leverage Options and ETF Neutral
• MACD: 3.69 (bullish divergence)
• RSI: 68.9 (momentum intact)
• 200-day MA: $109.57 (far below)
• 30-day MA: $140.45 (broken to the upside)
• Bollinger Bands: Price at upper band ($152.37), signaling overextension

SCCO’s technicals scream for a continuation trade. Key levels to watch: the 52-week high ($161.59) and the 200-day MA ($109.57) as support. The options chain offers two standout contracts for aggressive positioning:

• SCCO20260116C160 (Call):
- Strike: $160 | Expiry: 2026-01-16 | IV: 41.16% | Leverage: 37.07% | Delta: 0.496 | Theta: -0.3488 | Gamma: 0.0350 | Turnover: 97,414
- IV: Moderate volatility | Leverage: High reward potential | Delta: Balanced sensitivity | Theta: Aggressive time decay | Gamma: High sensitivity to price moves | Turnover: Strong liquidity
- This contract offers a sweet spot for a 5% upside scenario (targeting $167.45). A 5% move would yield a payoff of $7.45 per contract, with leverage amplifying returns. The high gamma ensures it gains value rapidly if SCCO breaks above $160.

• SCCO20260116C165 (Call):
- Strike: $165 | Expiry: 2026-01-16 | IV: 40.56% | Leverage: 68.70% | Delta: 0.327 | Theta: -0.2799 | Gamma: 0.0321 | Turnover: 38,006
- IV: Slightly lower but still robust | Leverage: Exceptional reward | Delta: Moderate sensitivity | Theta: Moderate time decay | Gamma: Strong sensitivity | Turnover: Sufficient liquidity
- With a 68.7% leverage ratio, this contract could deliver a 343.5% return on a 5% price move. The lower delta suits a slower, grinding rally, while the high gamma ensures it accelerates if SCCO surges past $165.

Aggressive bulls should target SCCO20260116C160 into a close above $160. The 52-week high and 200-day MA confluence create a high-probability setup for a breakout. If SCCO fails to hold $157.63 (intraday low), consider short-term puts like SCCO20260116P155 for downside protection.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a 3% intraday increase from 2022 to now shows favorable results. The 3-day win rate is 54.26%, the 10-day win rate is 54.07%, and the 30-day win rate is 58.72%. This indicates that SCCO 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: Position for a Breakout Above $161.59
SCCO’s technicals and options activity confirm a high-conviction bullish scenario. The 52-week high and 200-day MA alignment create a powerful catalyst for a breakout. Freeport-McMoRan’s 2.47% gain underscores sector-wide optimism. Traders should prioritize the SCCO20260116C160 call for a 5% upside target, leveraging the stock’s momentum. Watch for a close above $161.59 to validate the breakout and trigger a cascade of algorithmic buying. Act now: Buy SCCO20260116C160 ahead of the $160 psychological level.