FCX (Short)...

It's been a long time since we looked at FCX as a short here. And that setup for a head-and-shoulders top failed miserably. Indeed, that actually would've proven to be a great time to buy. I missed that one. It could've been worse; I could've been short of it through that massive move higher. Oh well.

But I'm going back to the well here. This time, I think it's an island top forming in FCX. You can see how FCX gapped up to begin August, but gapped down today, thus creating a little island of sorts. This is typically a pretty reliable pattern for a top. Today was also significant in that $60 acted as resistance for several months until it was broken by the aforementioned gap-up to start August.

So we'll look to play it by having a stop above today's highs (call it $61 or so) because if it goes that high, it's probably going to fill that gap, which would take us probably up around $64 or so. I would look for the 50-day and 200-day EMAs to act as support temporarily on a pullback, but if this pattern really sets in, FCX could head back to the bottom of the range and end up around $45.



Position: none